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EvaluatePharma ® World Preview 2016, Outlook to 2022 9th Edition – September 2016 Welcome to the EvaluatePharma World Preview 2016, Outlook to 2022 ® The ninth edition of EvaluatePharma’s World Preview brings together many of our analyses to provide a top level insight, from the world’s financial markets, into the expected performance of the industry between now and 2022. Based on EvaluatePharma’s coverage of the world’s leading 5,000 pharmaceutical and biotech companies, the World Preview highlights trends in prescription drug sales, patent risk, R&D spend, global brand sales and market performance by therapy area. Also included this year are new analysis on Worldwide Pharma Innovation 2008-2022 with insights into the companies with most valuable pipelines based on NPV analysis, best performing products and the most successful launches since 2010. Complimentary copies of the full report can be downloaded at: www.evaluate.com/PharmaWorldPreview2016 2 EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. Foreword Recent events in the world of health care could give cause to think that the good times might be at an end for the pharma industry, following a spectacular four-year bull run. Increasingly vocal politicians railing against US drug pricing, a weak global recovery, the uncertainties thrown up by Brexit, and the outcome of US presidential race have all combined to make investors jittery. The situation has led to a sharp re-rating of stock prices in 2016 and the IPO and venture financing markets being hit heavily. But for those willing to take a longer term view the outlook is a bit more nuanced. This year’s World Preview shows worldwide prescription sales are forecast to show annual compound growth of 6.3% between 2016 and 2022. Most of this growth is being driven by the prospects for a raft of new products that will come onto the market in the next seven years – treatments that will hopefully take the torch from industry’s superstars, like Harvoni, whose light is now fading. Roche’s Tecentriq was approved in bladder cancer this year and the anti-PD-L1 MAb is set to be one of the best selling drugs in 2022, its stable mate Ocrevus is set to be approved this year and along with other R&D stars such as dupilumab should help the industry to keep moving in the right trajectory. Meanwhile, recent R&D productivity gains have resulted in ever more treatments moving swiftly through the pipeline, with 56 products approved in 2015, a number that broke what seemed like the unassailable record of 50 in 2014. However, at the current run rate 2016 might only see 47 drugs approved, raising the following question: rather than being a new normal, was 2015 the peak? If this is the case then the forecast 2.8% increases in compounded annual R&D spend to 2022 might now only yield diminishing returns. The potential for falling drug approvals is not the only possible change in the industry. For the first time in years Novartis has had its crown snatched as the number one pharma company by prescription sales. Roche is now top of the heap, albeit by the most slender of margins, thanks in part to some of the more untraditional areas of its pipeline. Multiple sclerosis drug Ocrevus and haemophilia treatment emicizumab are both among the top 20 most valuable R&D projects and have helped Roche eclipse its fellow countryman as well as claim the title of the company with the most valuable pipeline. But with only a cigarette paper between Novartis and Roche, the current rankings could be quickly reversed, especially given the Roche’s higher exposure to biosimilar competition. 3 EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. Foreword What perhaps is more interesting in the battle of giants is the rapid advancement made by big biotech Celgene, and surprisingly Shire, both of whom have significantly improved their positions in the table – Celgene can thank the continued strength of Revlimid and newer products Otezla and Pomalyst, while Shire has achieved its advancement by the acquisition of Baxalta. Certain therapy areas are also set to continue to increase rapidly, adding to the strong overall growth forecasts for the industry. Oncology remains the sector’s powerhouse, clocking up compound annual sales growth of almost 13% over the next seven years, driven by recent advances in immunotherapy that have facilitated the launch of drugs such as Keytruda, Imbruvica and Tecentriq. Expanding waistlines across the globe are helping to prop up sales of anti-diabetic drugs. The therapy area is set to grow 7% annually by 2022. The aging population and the concomitant need to treat macular degeneration are driving the expansion of sales in the sensory organs sector. Indeed, there is no therapy area forecast to see a decline in sales. The worst performing, anti-virals, only recorded flat growth due mainly to the rapid slowdown in hepatitis C sales following a spectacular peak in 2015. There are, however, several issues that could spoil this rosy picture of uninterrupted growth. Few could have predicted the savage reversal of fortune suffered by speciality pharma groups and particularly Valeant. These were the companies that drove much of the M&A activity and sector share price gains in 2014-2015. During that time they were rewarded for their business models of aggressive debtfuelled expansion, and price increases for elderly products. It was the eventual political scrutiny over pricing of some of these older drugs that started the wheels in motion, first bringing Turing Pharmaceuticals to its knees and then Valeant. The recent outcry over Mylan’s price increases for EpiPen –followed by the company’s repeated capitulations – show just how sensitive pricing models can be to political pressure. What this could result in is companies having to spend more time in pricing drugs according to real world benefits and proven efficacy, rather than what they believe the market can bear. And with the US presidential elections around the corner, the political pressure on pricing is unlikely to ease. While any rhetoric is unlikely to make it into legislation anytime soon, the uncertainty could impact the industry. What all of this will almost certainly do is make market access one of the most important deciding factors in a drug’s success or failure, as shown by the slow uptake of the PCSK9 class and heart failure drug Entresto. The other seismic impact on the industry could be the widespread adoption of biosimilars. Last month Sandoz’s biosimilar version of Enbrel was approved in America, in the next five years some of the industry’s biggest beasts will succumb to lookalike competition in the US. The likes of Humira, Rituxan and Avastin are all forecast to fall by 2020. 4 EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. Foreword The big question is if sell side analysts have properly estimated the threat. If the uptake of Remsima in Europe, which has forced Merck to discount its list price for Remicade by 25% in the UK and seen biosimilars capture over 90% of the Norwegian market, are anything to go by then the sales of biosimilars in the US could be much higher than currently forecast. However, the biosimilar threat will be held at bay, for now, until biosimilar developers can finally end the patent dance, a process that is currently keeping approved US products off the market. But strong support for biosimilars is coming both from politicians and payers, with the likes of Express Scripts weighing into the debate about how much of the healthcare budget could be saved by using biosimilar products. Drug failure also remains a risk to the industry. Opdivo’s recent disappointment in non-small cell lung cancer should serve as a warning, not only for the perils involved in clinical trials, but also the over exuberance of sell-side forecasts. So while currently the industry does have plenty to celebrate, there are numerous potential brakes on progress that could make the outlook much more mixed. Antonio Iervolino Head of Forecasting, Evaluate Ltd 5 EvaluatePharma® World Preview 2016 Lisa Urquhart Editor, EP Vantage Copyright © 2016 Evaluate Ltd. All rights reserved. Analysis Highlights Worldwide Prescription Drug Sales 2016-22 in figures +6.3% DRIVERS $169bn 56 Additional sales in 2022 from R&D pharmaceutical pipeline. New FDA approvals in 2015, topping 2014 record. CAGR* 2016-22 BRAKES Increase of the pharmaceutical bill. Can the system afford it? Additional sales in 2022 exposed to clinical and market access risk (e.g. recent setbacks Opdivo, abemaciclib) +6.3% $343bn $32bn Increasing value of new FDA approvals (USA sales 5 yrs post launch). Sales at risk during 2016-22 period. Increasing risk from biosimilars. $249bn +13% 2016-22 CAGR for Cancer and Immunosuppressants market. Biosimilar erosion expected for top selling biologics. Conservative estimate? -33% 51% Additional sales in 2022 from products recently launched in the market (lower risk vs. R&D assets). US market CAGR 2016-22. Still feasible despite increasing scrutiny from payers. +7% * Compound Annual Growth Rate. •Worldwide prescription drug sales forecasted to grow at 6.3% (CAGR) 2016-2022 •50% of the 2022 increase in sales to come from R&D projects (+$169bn) •Novartis and Roche to compete head to head for the crown of worldwide prescription sales in 2022. Pfizer to challenge them following Medivation acquisition. •Celgene (+16%) and Shire (+19%) expected to record the fastest sales growth (CAGR) by 2022. 6 EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. Analysis Highlights •Biologics to contribute 50% of the Top 100 product sales by 2022; Roche leads market. •Roche has the highest valued pipeline (NPV) at $43bn in 2022. •Gilead is the top value creator based on 2015 sales from recently launched products. •Tecfidera best commercial launch after hepatitis C’s success stories Harvoni and Sovaldi. •Roche’s ocrevus and Sanofi’s dupilumab projected to be the most valuable R&D projects. •Worldwide pharmaceutical R&D spend expected to grow by 2.8% (CAGR) to $182bn in 2022. •Roche overtakes Novartis with biggest spend on pharmacuetical R&D in 2022. •New drug approvals in 2015 reach a record 56 NMEs. •Oncology is still the largest therapy area by sales (+12.5% CAGR) 2016-22. •Roche remains the leader of the oncology field but its growth is set to fade due to biosimilars. •Abbvie still dominates anti-rheumatics market in 2022; high expectations on Lilly’s baricitinib. •GlaxoSmithKline gains vaccines market leadership following oncology portfolio deal swap with Novartis. •Pfizer’s pneumococcal vaccine Prevnar-13 remains the top selling vaccines product. •Gilead’s lead continues in anti-viral market in 2022 largely due to its HIV portfolio. •Opdivo and Revlimid to compete for the top selling products in the world in 2022. •Roche products make up 10% of top 50 selling products in the world in 2022. •AbbVie’s Humira will continue to be the leading product in the USA in 2022, with sales of $10.7bn. •Xarelto to emerge as the top selling brand in Europe with €2.5bn sales in 2022. 7 EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. Table of Contents Contents 8 9 Worldwide Prescription Drug Sales (2008-2022) 11 Regional Prescription Drug Sales: USA, Europe and Japan (2013-2015) 12 Regional Prescription Drug Sales: USA (2013-2015) 14 Regional Prescription Drug Sales: Europe (2013-2015) 16 Regional Prescription Drug Sales: Japan (2013-2015) 18 Worldwide Prescription Drug Sales in 2022: Top 20 Companies 20 Worldwide Prescription Drug & OTC Sales by Technology (2008-2022) 22 Worldwide Pharma Innovation (2008-2022) NEW 25 Top 20 Most Valuable R&D Projects (Ranked by Net Present Value) 27 Worldwide R&D Spend by Pharma & Biotech Companies (2008-2022) 28 Pharmaceutical R&D Spend in 2022: Top 20 Companies 29 FDA New Drug Approvals Analysis NMEs & Biologicals (2001-2015) 31 Worldwide Prescription Drug & OTC Sales by Therapy Area in 2022 33 Oncology Market to 2022 35 Anti-Diabetics Market to 2022 37 Anti-Rheumatics Market to 2022 39 Vaccines Market to 2022 41 Anti-Virals Market to 2022 44 2022: Top 50 Selling Products in the World 46 2022: Top 50 Selling Products in the USA EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. Worldwide Prescription Drug Sales (2008-2022) part 1 of 2 characterised by larger unmet need and easier market access. Worldwide prescription drug sales forecasted to grow at 6.3% (CAGR) through to 2022. There are two dynamics at play that could affect this optimistic outlook. Firstly, the $249bn of sales at risk between 2016 and 2022 signals that the pharma industry has just entered a second patent cliff era where top biologic blockbusters will be challenged by biosimilars. And the current scenario modelled by brokers tends to forecast a very conservative impact for upcoming biosimilars. Secondly, the US market access landscape is rapidly transforming and the criteria set by payers, once looser, are much more stringent. The slow uptake of Entresto and the PCSK9 inhibitors (Praluent and Repatha), as well as the recent increase in the number of drug exclusions announced by both CVS and Express Scripts are points in case. According to EvaluatePharma® consensus forecasts, the pharmaceutical industry is set to grow at 6.3% per year (CAGR) reaching $1.12tr by 2022. The new wave of innovative therapies (Opdivo, Keytruda and Ibrance among others) approved by regulators in the last three years will be the core engine behind this trend and it also seems to prove that the transformation of the pharmaceutical R&D model is moving into the right direction. The orphan drug market is expected to almost double between 2016-22, peaking at $217bn in 2022 and further demonstrates that R&D programmes are increasingly oriented towards more narrow patient populations Worldwide Total Prescription Drug Sales (2008-2022) Source: EvaluatePharma® August 2016 1,200 +6.3% CAGR 2016-22 800 600 400 584 557 547 536 565 567 673 639 610 579 566 584 143 161 181 217 127 200 113 200 61 53 64 53 70 59 79 65 84 66 90 69 96 102 74 73 80 86 92 97 103 109 115 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 0 Generics Orphan Rx excl. Generics & Orphan Worldwide Sales At Risk from Patent Expiration (2008-2022) 80 Source: EvaluatePharma® August 2016 8% 7% 6% 70 WW Sales ($bn) 789 752 712 6% 7% 60 50 4% 5% 4% 40 30 3% 20 10 16 52 4% 38 33 29 26 5% 10 9 2008 2009 2010 0 4% 4% 35 34 24 23 21 17 32 19 2% 16 6% 5% 4% 40 29 20 12 4% 50 48 5% 52 20 18 3% 2% 2% 23 16 % at Risk WW Prescription Drug Sales ($bn) 1,000 12 12 1% 0% 2011 2012 2013 Total Sales at Risk 2014 2015 2016 Expected Sales Lost 2017 2018 2019 2020 2021 2022 % Market at Risk Patent Analysis: ‘Total Sales at Risk’ represents the worldwide product sales in the year prior to patent expiry but allocated to the year of expiry. E.g. Plavix had sales of $7.1bn in 2011, this is shown above as ‘At Risk’ in 2012. 9 EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. Worldwide Prescription Drug Sales (2008-2022) part 2 of 2 Worldwide Prescription Drug Sales (2008-2022) Source: EvaluatePharma® August 2016 WW Prescription Sales ($bn) Year Prescription 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 650 663 687 729 717 724 749 742 778 822 873 931 996 1,060 1,121 +2.0% +3.5% +6.1% -1.6% +0.9% +3.5% -1.0% +4.8% +5.7% +6.2% +6.6% +7.0% +6.5% +5.7% 6 6 2 5 9 Growth per Year Change vs. June 2015 ($bn) Generics Generics as % of Prescription Prescription excl. Generics 53 53 59 65 66 69 74 73 80 86 92 97 103 109 115 8.2% 8.0% 8.6% 9.0% 9.2% 9.5% 9.9% 9.9% 10.3% 10.5% 10.5% 10.4% 10.4% 10.3% 10.2% 596 610 627 663 651 655 675 669 698 736 781 834 893 952 1,006 +2.3% +2.8% +5.8% -1.9% +0.6% +3.1% -1.0% +4.4% +5.5% +6.2% +6.7% +7.1% +6.6% +5.7% 61 64 70 79 84 90 96 102 113 127 143 161 181 200 217 536 547 557 584 567 565 579 566 584 610 639 673 712 752 789 Growth per Year Orphan Prescription excl. Generics & Orphan Prescription incl. Generics CAGR 16-22 +6.3% Note: Industry sales based on Top 500 pharmaceutical and biotech companies. Sales to 2015 based on company reported sales data. Sales forecasts to 2022 based on a consensus of leading equity analysts’ estimates for company product sales and segmental sales. 10 EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. Regional Prescription Drug Sales: USA, Europe & Japan (2013-2015) Key prescription drug sales jump 7.5% in 2015, driven by the sustained growth in both US and Europe. Japan slumps 2.4% in yen. According to sales reported by the Top 20 companies, the market across US, Europe and Japan has accelerated by 7.5% in 2015, primarily driven by the growth of new innovative therapies in US (+9.3% vs. 2014) and Europe (+8.8% vs. 2014). While questions remain on the sustainability of this trend in the long run, we are not expecting any major change in 2016. The growth in the western regions is counterbalanced by the slow down in the Japanese market where the Top 20 companies’ sales declined by 2.4% in local currency vs. the previous year. 2014 & 2015 Regional Local Currency Prescription Drug Sales Growth: Top 20 Companies in each Region Source: EvaluatePharma® August 2016 14% 12% +11.9% +9.3% 10% +8.8% +8.8% +8.7% +7.5% Rx Sales Growth 8% 6% 4% +3.0% 2% 0% -2% -2.4% -4% USA Europe Japan 2013/2014 Subtotal – Top 20 Companies 2014/2015 Regional Prescription Drug Sales (2013-2015): Observed Top 20 Companies in each Market Source: EvaluatePharma® August 2016 Growth Sales ($bn) (US$) (Local Currency) Region 2013 2014 2015 2013/14 2014/15 2013/14 2014/15 USA 204.2 228.6 250.0 +11.9% +9.3% +11.9% +9.3% Europe 118.3 121.9 110.7 +3.0% -9.1% +3.0% +8.8% Japan 65.2 58.4 52.3 -10.5% -10.5% +8.7% -2.4% Subtotal - Top 20 Companies 387.8 408.9 413.0 +5.4% +1.0% +8.8% +7.5% Unallocated 335.5 339.8 328.5 Total Worldwide Prescription Sales 723.3 748.7 741.5 +3.5% -1.0% Currency Sensitivity Analysis Currency (ending December) Source: EvaluatePharma® August 2016 2012 2013 2014 2015 2012/13 2013/14 2014/15 Euro (1€ = US $) 1.33 1.33 1.11 1.12 +0.0% -16.5% +0.5% Japan (100 ¥ = US $) 1.25 1.03 0.95 0.84 -18.1% -7.7% -11.6% China (1 RMB = US $) 0.16 0.16 0.16 0.16 +2.6% -0.2% -1.0% Analysis is based on observing the reported geographic sales from US, Europe and Japan for the top 20 companies in each market in 2015. In addition, available reported government data on pharmaceutical purchases was reviewed. 11 EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. Regional Prescription Drug Sales: USA (2013-2015) US prescription drug market continues to grow at a sustained pace, +9.3% vs. 2014. Gilead mantains number one spot. part 1 of 2 of its hepatitis C franchise, notable performance are also shown by Abbvie, Celgene and Valeant. Negative performances have been observed for AstraZeneca, Sanofi and GSK where their key products have suffered from increasing branded and generic competition, although the near term outlook is expected to show improvement. Despite the growing challenges posed by US payers and large pharmacy benefit managers, the US market continues to perform strongly with 9.3% growth vs. the previous year. Gilead mantains its leadership position fuelled by the growth USA Prescription Drug Sales ($bn) USA Prescription Drug Sales in 2015: Top 10 Companies 25 Source: EvaluatePharma® August 2016 21.2 18.8 20 18.3 18.3 17.0 16.5 16.2 15.5 15 13.6 13.5 Sanofi AbbVie 10 5 0 Gilead Sciences Pfizer Johnson & Johnson Roche Allergan Amgen Merck & Co Novartis USA Prescription Drug Sales (2013-2015): Top 20 Companies (Pro-forma adjusted for M&A) Source: EvaluatePharma® August 2016 US Prescription Sales ($bn) Rank Company 1. Gilead Sciences 2. 3. Growth (US$) 2013 2014 2015 2013/14 2014/15 6.7 18.2 21.2 +171.6% +16.8% Pfizer 16.3 16.5 18.8 +1.0% +14.1% Johnson & Johnson 13.9 17.4 18.3 +25.0% +5.2% 4. Roche 16.3 17.3 18.3 +6.2% +5.8% 5. Allergan 11.1 15.9 17.0 +42.5% +7.3% 6. Amgen 14.0 14.7 16.5 +4.9% +12.2% 7. Merck & Co 14.9 14.2 16.2 -4.3% +14.2% 8. Novartis 15.2 15.2 15.5 -0.3% +2.0% 9. Sanofi 12.9 13.9 13.6 +8.4% -2.6% 10. AbbVie 10.2 10.8 13.5 +6.5% +24.7% 11. Teva Pharmaceutical Industries 10.5 10.6 11.2 +1.7% +5.8% 12. GlaxoSmithKline 9.1 10.7 10.4 +17.7% -3.1% 13. AstraZeneca 9.7 10.1 9.5 +4.4% -6.4% 14. Eli Lilly 11.7 7.9 8.6 -32.6% +8.9% 15. Novo Nordisk 7.0 7.7 8.5 +10.6% +10.1% 16. Bristol-Myers Squibb 8.3 7.7 8.2 -7.2% +6.1% 17. Valeant Pharmaceuticals International 3.2 4.5 7.1 +39.8% +59.2% 18. Biogen 3.6 5.6 6.5 +55.5% +17.6% 19. Celgene 3.9 4.5 5.6 +16.1% +25.0% 20. Boehringer Ingelheim Total 12 EvaluatePharma® World Preview 2016 5.9 5.2 5.4 -11.7% +3.4% 204.2 228.6 250.0 +11.9% +9.3% Copyright © 2016 Evaluate Ltd. All rights reserved. Regional Prescription Drug Sales: USA (2013-2015) part 2 of 2 Country Level Retail Expenditure on Prescription Drug Sales Source: EvaluatePharma® August 2016 Sales ($bn) Growth (US$) Country 2013 2014 2015 2013/14 2014/15 USA 271.1 305.1 328.4 +12.5% +7.6% 1 1: Source: USA CMS. 2015 is a CMS forecast. Analysis is based on observing the reported geographical prescription drug sales in the US for the top 20 companies in 2015. In addition, available government data (CMS) on pharmaceutical purchases of drugs was reviewed. 13 EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. Regional Prescription Drug Sales: Europe (2013-2015) part 1 of 2 also shown strong growth, +36% and +28.4% respectively.Negative performances were evident for Pfizer, AstraZeneca and Merck & Co, although the anticipated uptake of novel therapies is expected to reverse this trend in the 2016-17 period.If we look at the market as a whole based on government reported data sources (Evaluate European Drug Forecast®), Europe is expected to show a 3% CAGR 2016-22, mainly driven by the launch of new products currently in development. Xarelto to emerge as the top selling brand with €2.5bn of sales in 2022. Europe surprises with a 8.8% growth rate vs. 2014. Novartis still market leader, but Gilead is the largest growth driver. The European trend follows the same growth trajectory observed in the US with 8.8% growth in local currency vs. 2014 (Top 20 companies). While Novartis and Sanofi are still at the top of the rankings (respectively, number one and two), Roche overtakes Pfizer on the podium. Among the growth drivers Gilead deserves a special mention with 58.4% growth vs. previous year thanks to the uptake of its hepatitis C franchise in Europe. Celgene and GSK have European Prescription Drug Sales ($bn) European Prescription Drug Sales in 2015: Top 10 Companies 18 Source: EvaluatePharma® August 2016 16.5 16 14 11.0 12 9.1 10 8.9 8 7.7 7.2 7.1 6 5.4 5.3 4.9 Bayer AstraZeneca Teva Pharmaceutical 4 2 0 Novartis Sanofi Roche Pfizer Merck & Co Gilead Sciences GlaxoSmithKline Europe Prescription Drug Sales (2013-2015): Top 20 Companies EU Prescription Sales ($bn) Rank Company 2013 2014 Growth (US$) 2015 2013/14 Source: EvaluatePharma® August 2016 EU Prescription Sales (€bn) 2014/15 Growth (€) 2013 2014 2015 2013/14 2014/15 +12.8% 1. Novartis 17.2 17.5 16.5 +1.8% -5.8% 12.9 13.2 14.8 +1.8% 2. Sanofi 13.3 13.1 11.0 -1.1% -16.2% 10.0 9.9 9.9 -1.1% +0.3% 3. Roche 10.0 10.3 9.1 +3.2% -11.9% 7.5 7.8 8.2 +3.2% +5.5% 4. Pfizer 11.0 10.9 8.9 -0.9% -18.9% 8.3 8.2 8.0 -0.9% -2.9% 5. Merck & Co 9.6 9.6 7.7 -0.4% -19.5% 7.2 7.2 7.0 -0.4% -3.6% 6. Gilead Sciences 3.6 5.4 7.2 +50.6% +32.3% 2.7 4.1 6.5 +50.6% +58.4% 7. GlaxoSmithKline 6.6 6.6 7.1 +0.5% +7.2% 5.0 5.0 6.4 +0.5% +28.4% 8. Bayer 5.2 5.8 5.4 +12.2% -7.5% 3.9 4.4 4.9 +12.2% +10.8% 9. AstraZeneca 6.7 6.6 5.3 -0.3% -19.8% 5.0 5.0 4.8 -0.3% -4.0% 10. Teva Pharmaceutical Industries 6.0 5.8 4.9 -2.8% -16.0% 4.5 4.4 4.4 -2.8% +0.6% 11. Eli Lilly 4.3 4.5 3.9 +3.9% -12.5% 3.3 3.4 3.6 +3.9% +4.8% 12. Bristol-Myers Squibb 3.9 3.6 3.5 -8.6% -2.8% 3.0 2.7 3.1 -8.6% +16.4% 13. Novo Nordisk 3.6 3.6 3.1 +0.5% -13.8% 2.7 2.7 2.8 +0.5% +3.2% 14. Merck KGaA 3.3 3.2 3.0 -2.3% -6.0% 2.5 2.4 2.7 -2.3% +12.6% 15. Boehringer Ingelheim 3.9 3.6 3.0 -6.4% -16.6% 2.9 2.7 2.7 -6.4% -0.1% 16. Astellas Pharma 2.6 2.9 2.8 +8.5% -2.6% 2.0 2.2 2.5 +8.5% +16.6% 17. Celgene 1.9 2.3 2.6 +23.9% +13.6% 1.4 1.7 2.4 +23.9% +36.0% 18. Biogen 1.6 2.2 2.2 +38.3% -1.4% 1.2 1.7 2.0 +38.3% +18.1% 19. STADA Arzneimittel 2.6 2.6 2.2 +1.8% -16.9% 1.9 2.0 1.9 +1.8% -0.5% 20. UCB 1.5 1.5 1.3 +3.3% -12.3% 1.1 1.1 1.2 +3.3% +5.0% Total 118.3 121.9 110.7 +3.0% -9.1% 89.1 91.7 99.8 +3.0% +8.8% 0.0 -21.9 Currency Impact ($bn) at 2012 rates: Note: Johnson & Johnson does disclose European pharmaceutical sales. Novartis’s sales based on actual and estimated segment sales. 14 EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. Regional Prescription Drug Sales: Europe (2013-2015) part 2 of 2 Source: EvaluatePharma® August 2016 Currency Rate 1€ = US $ 2013 2014 2015 2013/14 2014/15 1.33 1.33 1.11 +0% -16% Analysis is based on observing the reported geographic sales for the top 20 companies in Europe in 2015. Europe Total Market Growth (2015-2022) European Prescription Drug Sales (€bn) European Prescription Drug Sales Growth (2012-2022) Source: EvaluatePharma® August 2016 250 200 150 149.5 153.5 159.7 168.7 178.0 177.5 175.9 177.0 172.4 173.7 177.0 10.7 16.9 30.8 2.2 5.6 23.9 0.2 2016 2017 2018 2019 2020 2021 2022 100 50 0 2012 2013 2014 2015 Marketed R&D Europe Top 5 Selling Products 2015 & 2022 Source: EvaluatePharma® August 2016 Rank Product EU Prescription Sales (€m) 2015 Product EU Prescription Sales (€m) 2022 1. Humira 3,292.9 Xarelto 2,531.5 2. Enbrel 2,127.9 Opdivo 2,375.8 3. Herceptin 2,116.8 Revlimid 2,085.1 4. Harvoni 2,000.1 Eylea 1,782.7 5. Rituxan 1,914.6 Soliris 1,575.3 15 EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. Regional Prescription Drug Sales: Japan (2013-2015) Japan market contracts -2.4% in local currency. Takeda, Daiichi-Sankyo and Astellas still leading the market. part 1 of 2 (+18.1%), driven by the uptake of Opdivo. The performance of the PD-1 inhibitor and its high price tag have drawn further attention to the high cost of some of the novel pharmaceuticals in Japan and more action is expected from the government to control pharmaceutical expenditure. Daiichi-Sankyo has now taken over Astellas as the second largest player in the Japanese market. The Japanese market sales showed a -2.4% decline during the 2014-15 period, with more than half of the Top 20 companies reporting negative performances. Eli Lilly and Bayer are the only non-Japanese companies increasing sales, while among the local players Ono Pharmaceuticals has recorded the highest growth JapanesePrescription Drug Sales ($bn) Japanese Prescription Drug Sales in 2015: Top 10 Companies 5 4.5 4 4.1 Source: EvaluatePharma® August 2016 4.1 3.6 3.5 3.4 3.2 3 2.6 2.6 Merck & Co Mitsubishi Tanabe Pharma 2.3 2 1 0 Takeda Daiichi Sankyo Astellas Pharma Pfizer Bayer Roche Otsuka Holdings Japanese Prescription Drug Sales (2013-2015): Top 20 Companies Japan Prescription Sales ($bn) Rank Company 1. Takeda Growth ($) Sanofi Source: EvaluatePharma® August 2016 Japan Prescription Sales (¥bn) Growth (¥) 2013 2014 2015 2013/14 2014/15 2013 2014 2015 2013/14 2014/15 5.8 5.1 4.5 -11.7% -12.0% 483 514 496 +6.5% -3.5% 2. Daiichi Sankyo 4.9 4.4 4.1 -9.6% -6.1% 403 440 453 +9.1% +3.0% 3. Astellas Pharma 5.3 4.6 4.1 -14.0% -10.4% 440 457 449 +3.8% -1.7% 4. Pfizer 5.1 4.4 3.6 -13.6% -18.7% 409 431 380 +5.5% -11.9% 5. Bayer 3.3 3.6 3.5 +8.7% -1.5% 261 347 371 +32.8% +6.8% 6. Roche 3.7 3.6 3.4 -1.8% -7.2% 293 352 354 +20.0% +0.5% 7. Otsuka Holdings 3.7 3.3 3.2 -11.2% -2.7% 309 331 354 +7.1% +6.8% 8. Merck & Co 3.9 3.4 2.6 -14.2% -23.1% 315 330 275 +4.8% -16.7% 9. Mitsubishi Tanabe Pharma 3.4 3.0 2.6 -13.2% -13.3% 283 297 282 +4.7% -4.8% 10. Sanofi 3.3 2.8 2.3 -15.5% -17.9% 266 274 244 +3.3% -11.1% 11. Kyowa Hakko Kirin 2.7 2.4 2.3 -11.0% -3.5% 214 232 243 +8.8% +4.5% 12. Eisai 3.1 2.5 2.2 -18.1% -12.6% 258 255 244 -1.2% -4.1% 13. Novartis 3.3 2.7 2.2 -18.2% -18.5% 263 263 232 -0.0% -11.7% 14. Eli Lilly 2.1 2.0 2.0 -1.8% +0.3% 165 198 215 +20.0% +8.7% 15. AstraZeneca 2.5 2.2 2.0 -10.4% -9.3% 198 217 213 +9.5% -1.7% 16. GlaxoSmithKline 2.6 2.4 1.9 -8.3% -22.1% 207 232 196 +12.1% -15.6% 17. Boehringer Ingelheim 2.0 1.9 1.7 -5.3% -11.9% 163 188 179 +15.6% -4.6% 18. Meiji Holdings 1.4 1.3 1.4 -3.5% +1.6% 115 134 149 +16.5% +11.5% 19. Shionogi 1.7 1.5 1.4 -12.2% -8.4% 140 148 149 +5.9% +0.5% 20. Ono Pharmaceutical 1.4 1.2 1.3 -13.2% +7.7% 119 124 147 +4.7% +18.1% 58.4 52.3 -10.5% -10.5% 5,304 5,765 5,625 +8.7% -2.4% -11.0 -15.5 Total Currency Impact ($bn) at 2012 rates: 16 EvaluatePharma® World Preview 2016 65.2 Copyright © 2016 Evaluate Ltd. All rights reserved. Regional Prescription Drug Sales: Japan (2013-2015) part 2 of 2 Source: EvaluatePharma® August 2016 Currency Rate (Ending 31 March) 2012 2013 2014 2015 May Fiscal year 2011 2012 2013 2014 2015 2011/12 2012/13 2013/14 2014/15 1¥=$ 0.0127 0.0120 0.0100 0.0091 0.0083 -5% -17% -9% -9% 1$=¥ 79.0 83.0 100.2 109.9 120.4 NOV 2012: Yen depreciation due to change in monetary policy after Shinzo Abe elected Prime Minister. Analysis is based on observing the reported geographical prescription drug sales in the US for the top 20 companies in 2015. 17 EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. Worldwide Prescription Drug Sales in 2022: Top 20 Companies Novartis and Roche to compete for the crown in 2022. Celgene (+16%) and Shire (+19%) expected to record fastest sales growth by 2022. According to EvaluatePharma® consensus forecasts, Novartis and Roche are competing for the number one spot in 2022. Roche has a small edge based on the figures available as of August 2016, but many factors will be at play. Entresto, Cosentyx and ribociclib (LEE001) are expected to drive Novartis’ growth, while Roche’s performance will be dependent on continuous growth of Perjeta and Gazyva, the launch of the PD-1 inhibitor Tecentriq and the success of Ocrevus in the highly competitive multiple sclerosis market. The higher exposure of Roche’s portfolio to biosimilars and Pfizer’s recent acquisition of Medivation part 1 of 2 (and its leading asset Xtandi) could change the ranking. Shire and Celgene are expected to achieve the highest CAGR in the 2016-22 timeframe (+19% and +16% respectively). The acquisition of Baxalta is the main engine driving Shire’s expected performance, while Celgene’s growth is expected to come from the sustained performance of Revlimid along with novel therapies Otezla and Pomalyst. Gilead Sciences is the only company expected to decline through 2022 due to the largely anticipated slow down of its hepatitis C franchise which will only be partly compensated by new launches in the HIV space. However, the outlook does not take into account potential acquisitions that Gilead may undertake to fill the portfolio gap. Worldwide Prescription Drug Sales in 2022: Top 10 Companies 52.6 +2 52.5 0 50.0 Sales ($bn) Ranking Change 2015-22 49.1 -2 +18% 45.4 +1 39.8 +2 40.0 +16% 39.2 -2 32.5 +1 +14% 31.0 +2 30.7 +3 30.0 30.2 -1 +4% 10.0 +2% +8% +5% +4% +4% +3% +4% +3% +2% +12% +10% +8% 20.0 +20% +6% CAGR 2015 - 2022 (%) WW Prescription Drug Sales ($bn) 60.0 Source: EvaluatePharma® August 2016 +4% +2% +0% 0.0 Roche Novartis Pfizer Sanofi Johnson & Johnson Merck & Co GlaxoSmithKline AbbVie Allergan Worldwide Prescription Drug Sales (2015 - 2022): Top 20 Companies & Total Market Source: EvaluatePharma® August 2016 WW Prescription Sales ($bn) Rank Company 1. AstraZeneca WW Market Share Rank 2015 2022 CAGR 2015 2022 Chg. (+/-) Chg. (+/-) Roche 38.7 52.6 +4% 5.2% 4.7% -0.5pp +2 2. Novartis 42.5 52.5 +3% 5.7% 4.7% -1.0pp +0 3. Pfizer 43.1 49.1 +2% 5.8% 4.4% -1.4pp -2 4. Sanofi 34.8 45.4 +4% 4.7% 4.0% -0.7pp +1 5. Johnson & Johnson 29.9 39.8 +4% 4.0% 3.6% -0.5pp +2 6. Merck & Co 35.2 39.2 +2% 4.8% 3.5% -1.3pp -2 7. GlaxoSmithKline 27.1 32.5 +3% 3.6% 2.9% -0.7pp +1 8. AbbVie 22.7 31.0 +5% 3.1% 2.8% -0.3pp +2 9. Allergan 18.4 30.7 +8% 2.5% 2.7% +0.2pp +3 10. AstraZeneca 23.3 30.2 +4% 3.1% 2.7% -0.4pp -1 Top 1 1-20 continued over… 18 EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. Worldwide Prescription Drug Sales in 2022: Top 20 Companies part 2 of 2 Source: EvaluatePharma® August 2016 WW Prescription Sales ($bn) Rank Company 2015 2022 11. 12. Gilead Sciences 32.2 Bristol-Myers Squibb 14.5 13. Novo Nordisk 14. Amgen 15. Celgene 16. Eli Lilly 17. WW Market Share Rank CAGR 2015 2022 Chg. (+/-) Chg. (+/-) 29.0 -1% 4.3% 2.6% -1.7pp -5 27.6 +10% 2.0% 2.5% +0.5pp +5 16.1 27.3 +8% 2.2% 2.4% +0.3pp +1 20.9 27.0 +4% 2.8% 2.4% -0.4pp -3 9.1 25.6 +16% 1.2% 2.3% +1.1pp +8 15.9 22.0 +5% 2.1% 2.0% -0.2pp -1 Shire 6.1 20.5 +19% 0.8% 1.8% +1.0pp +12 18. Bayer 15.6 19.6 +3% 2.1% 1.7% -0.4pp -2 19. Boehringer Ingelheim 12.4 18.3 +6% 1.7% 1.6% -0.0pp -1 20. Teva Pharmaceutical Industries 17.0 17.5 +0% 2.3% 1.6% -0.7pp -7 Total Top 20 475.4 637.4 +4% 64.1% 56.9% -7.2pp Other 266.1 483.4 +9% 35.9% 43.1% Total 741.5 1,120.9 +6% 100.0% 100.0% Note: Prescription drug sales include generic drug sales. Excludes alliance revenue and royalties where possible. 19 EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. Worldwide Prescription Drug & OTC Sales by Technology (2008-2022) Use of biotech technology continue to rise, contributing to 50% of the Top 100 product sales by 2022. Roche still market leader. part 1 of 2 Within this outlook, Roche will continue to be the undisputed market leader and is expected to further consolidate its position with the launch of novel biologic therapies (Tecentriq and Ocrevus, but also emicizumab and lampalizumab). Bristol Myers Squibb is expected to climb the ranking provided Opdivo mantains the current expectations. The uptake of biologics is expected to continue as novel biologic blockbusters keep entering the pharmaceutical market. The penetration of biotech products is set to increase from a 24% market share in 2015 to 29% in 2022. According to the latest EvaluatePharma® consensus forecast, in 2022 50% of the value of the top 100 products will come from biologics as established chemical products drop off the patent cliff and new breakthrough biologics get approved. Amgen is set to fall down the rankings due to a number of its biologics going off patent, but new launches are expected to still ensure a positive CAGR (+3%) through 2022. Worldwide Prescription Drug & OTC Pharmaceutical Sales: Biotech vs. Conventional Technology 90% 83% 83% 82% 82% 80% 78% 77% Technology % of Rx & OTC Sales 80% 76% Source: EvaluatePharma® August 2016 75% 74% 73% 73% 72% 71% 71% 70% 60% Biotech Products Within Top 100 50% 30% 70% 40% 2022 Split: Rapid increase in share of Top 100 products: - 2008: 30% - 2015: 47% - 2022: 50% 47% 53% 50% Biotech: n=46 (avg. $3.8bn) Conv.: n=55 (avg. $3.1bn) 50% 30% 26% 28% 29% 20% 25% 29% 24% 27% 23% 27% 22% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 20% 10% 17% 17% 18% 18% 2008 2009 2010 2011 0% Biotechnology Conventional/Unclassified Worldwide Prescription Drug & OTC Sales by Technology (2008-2022) Technology Source: EvaluatePharma® August 2016 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Biotechnology 17% 17% 18% 18% 20% 22% 23% 24% 25% 26% 27% 27% 28% 29% 29% Conventional/Unclassified 83% 83% 82% 82% 80% 78% 77% 76% 75% 74% 73% 73% 72% 71% 71% Total Prescription & OTC Sales 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Technology 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Biotechnology 117 119 128 141 152 165 178 184 200 220 242 266 290 315 337 Conventional 423 433 442 463 440 431 442 433 440 453 473 497 526 556 582 WW Sales ($bn) Other Unclassified Sales 151 145 151 162 161 166 168 159 171 185 196 207 220 232 245 Total Prescription & OTC Sales 691 697 720 766 754 762 788 776 812 858 911 970 1037 1102 1164 20 EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. Worldwide Prescription Drug & OTC Sales by Technology (2008-2022) part 2 of 2 Worldwide Prescription Drug Sales from Biotechnology in 2022: Top 10 Companies Source: EvaluatePharma® August 2016 WW Sales ($bn) Rank Company 1. WW Market Share 2015 2022 % CAGR 15-22 2015 2022 Chg. (+/-) Rank Chg. Roche 31.1 43.6 +5% 16.9% 12.9% -4.0pp +0 2. Sanofi 14.9 25.3 +8% 8.1% 7.5% -0.6pp +2 3. Novo Nordisk 15.1 24.4 +7% 8.2% 7.2% -1.0pp +0 4. Amgen 18.8 23.2 +3% 10.2% 6.9% -3.3pp -2 5. Bristol-Myers Squibb 4.5 18.2 +22% 2.5% 5.4% +2.9pp +6 6. Johnson & Johnson 10.9 17.7 +7% 5.9% 5.2% -0.7pp +1 7. AbbVie 14.8 15.5 +1% 8.0% 4.6% -3.4pp -2 8. Eli Lilly 6.6 15.4 +13% 3.6% 4.6% +1.0pp +1 9. Pfizer 11.9 14.8 +3% 6.5% 4.4% -2.1pp -3 10. Merck & Co 7.9 13.0 +7% 4.3% 3.9% -0.4pp -2 Note: Company drug sales from undisclosed products are presumed to be from conventional (small molecule) technology. 21 EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. Worldwide Pharma Innovation (2008-2022) Roche has the highest value pipeline but its portfolio strategy carries risks. BMS portfolio strategy stands out. Tecfidera commercial best practice behind Harvoni and Sovaldi success stories in hepatitis C. Roche continues to lead the rankings by showcasing the most valuable pharmaceutical pipeline in the industry. Most of the value is driven by Roche’s efforts outside its core portfolio, oncology, notably Ocrevus and crenezumab (multiple sclerosis and Alzheimer’s disease, respectively), emicizumab in haemophilia and lampalizumab for the treatment of an advanced form of agerelated macular degeneration. The podium is completed by Novartis and AstraZeneca whose part 1 of 3 pipeline is charged with a lot of expectations (including durvalumab and acalabrutinib). However, if we place the lens on the best companies at capitalizing on recent launches (according to EvaluatePharma sales for product introduced in the market after December 2012), the top spot goes to Gilead which recorded an unprecedented performance following the launch of its hepatitis C blockbusters, Sovaldi and Harvoni. Biogen follows second with the success of Tecfidera, while GSK is third with the performance of its HIV franchise (developed by ViiV Healthcare). This trend does confirm that specialisation at therapy area level and a focused strategy are likely to pay off in terms of commercial success. Value Creators: Top 10 Pipelines NPV, $m Rank Company Pipeline NPV, $m 1. Roche 43,171 2. Novartis 24,091 3. AstraZeneca 23,160 4. Eli Lilly 19,677 5. AbbVie 19,364 6. Pfizer 18,214 7. Sanofi 17,699 8. Celgene 16,246 9. Biogen 13,621 10. Johnson & Johnson 13,157 Value Creators: Best companies at capturing value from recent launches (Dec 2012+) Top companies based on 2015 WW sales from recently launched products (Dec 2012+) Top companies based on 2022 WW sales from recently launched products (Dec 2012+) Primary Value Drivers Rank Company Harvoni, Sovaldi, Stribild 1. Gilead Sciences 17,720 Harvoni, Genvoya, Descovy 4,532 Tecfidera 2. Roche 17,215 Tecentriq, Perjeta, Gazyva 3,853 Triumeq, Tivicay, Otrivin 3. GlaxoSmithKline 14,625 Triumeq, Tivicay, Nucala Roche 2,611 Perjeta, Kadcyla 4. Novartis 14,502 Entresto, Cosentyx, Reaslanz Bristol-Myers Squibb 2,548 Daklinza, Opdivo 5. Bristol-Myers Squibb 14,297 Opdivo, Empliciti, Daklinza 6. AbbVie 2,298 Viekira Pak, Imbruvica 6. Sanofi 13,016 Praluent, Toujeo, Aubagio 7. Johnson & Johnson 2,252 Invokana, Olysio, Imbruvica 7. Johnson & Johnson 12,346 Imbruvica, Darzalex, Invokana 8. Astellas Pharma 2,240 Xtandi 8. Merck & Co 10,747 Keytruda, Zepatier 9. Sanofi 1,985 Aubagio, Lemtrada, Toujeo 9. Pfizer 10,038 Ibrance, Xeljanz, Inflectra 10. Pfizer 1,959 Ibrance, Xeljanz, Inlyta 10. AstraZeneca Rank Company 1. Gilead Sciences 2. Biogen 3. GlaxoSmithKline 4. 5. 22 2015 WW Sales, $bn 21,142 EvaluatePharma® World Preview 2016 2022 WW Sales, $bn 8,154 Primary Value Drivers Farxiga, Tagrisso, Eklira Genuair Copyright © 2016 Evaluate Ltd. All rights reserved. Worldwide Pharma Innovation (2008-2022) part 2 of 3 products outside its core specialty area. Similar considerations apply to Eli Lilly where the long term success of its portfolio is dependent on several pipeline projects (between abemaciclib, solanezumab and baricitinib only the latter seems to hold high promises based on the latest clinical development updates). When comparing portfolio strategies, interesting differences emerge between the top pharma companies. Bristol Myers Squibb has emerged from the post-patent cliff crisis with a virtuous portfolio strategy. GSK and Novartis seem also to fall into the same cluster. Despite a highly valued pipeline, there are two major risks looming on Roche’s portfolio: biosimilars and potential clinical setbacks with Top 20 Pharma: Value Creation vs. Value at Risk Rank Company Value Creation Index Value at Risk Index 1. 2. Rank Company Value Creation Index Value at Risk Index AbbVie 41% Allergan 24% 65% 11. 49% 12. GlaxoSmithKline 47% 42% Johnson & Johnson 41% 37% 3. Amgen 4. Astellas Pharma 27% 55% 18% 36% 13. Merck & Co 42% 39% 14. Novartis 46% 41% 5. AstraZeneca 39% 64% 15. Novo Nordisk 40% 53% Pfizer 26% 53% 6. Bayer 16% 44% 16. 7. Bristol-Myers Squibb 58% 14% 17. Roche 44% 73% Sanofi 38% 61% 41% 28% 8. Celgene 41% 31% 18. 9. Eli Lilly 63% 73% 19. Takeda 10. Gilead Sciences 85% 50% 20. Teva Pharmaceutical Industries 41% 69% Average 41% 49% Value creation index: % 2022 WW sales coming from pipeline and recently launched products (Dec 2012+) Value at risk index: % of 2022 WW sales at risk either because of generics or technical failure (pipeline products) Portfolio Strategy: Value Creation vs. Value at Risk 80% Roche UNBALANCED 70% Value at Risk Index 60% Amgen Novo Nordisk GSK Allergan Bayer RISKY Sanofi Pfizer 50% Eli Lilly Teva AbbVie AZ Gilead Merck 40% J&J Astellas 30% Source: EvaluatePharma® August 2016 Novartis Celgene Takeda 20% BMS 10% CONSERVATIVE VIRTUOUS 0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Value Creation Index 23 EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. Worldwide Pharma Innovation (2008-2022) In terms of commercial innovation, EvaluatePharma® has looked at the performance two years after launch of all the products launched globally from 2010 onward. If we exclude the exceptional part 3 of 3 performance of Harvoni and Sovaldi, a special mention goes to Tecifdera which stood out in the highly competitive multiple sclerosis market with $3bn in sales after two years. Commercial innovation – Best selling products after 2 years from launch Commercial innovation – Best selling products after 1 year from launch Analysis based on products launched after January 2010 Analysis based on products launched after January 2010 Rank WW 1. Harvoni (Gilead) 2. Rank WW 6,362 1. Harvoni (Gilead) 12,626 Sovaldi (Gilead) 5,461 2. Sovaldi (Gilead) 8,690 3. Tecfidera (Biogen) 3,228 3. Olysio (J&J) 2,016 4. Eylea (Bayer, Regeneron) 1,692 4. Incivek (Vertex) 1,541 5. Opdivo (BMS) 1,654 5. Tecfidera (Biogen) 1,382 6. Incivek (Vertex) 1,545 6. Viekira Pak (Abbvie) 1,133 7. Triumeq (GSK) 1,234 7. Daklinza (BMS) 763 8. Daklinza (BMS) 1,173 8. Ibrance (Pfizer) 723 9. Zytiga (J&J) 1,105 9. Eylea (Bayer, Regeneron) 587 10. Imbruvica (J&J, Abbvie) 1,104 10. Orkambi (Vertex) 574 11. Viekira Pak (Abbvie) 968 11. Yervoy (BMS) 514 12. Xgeva (Amgen) 931 12. Zytiga (J&J) 496 13. Olysio (J&J) 918 13. Triumeq (GSK) 442 14. Gilenya (Novartis) 888 14. Imbruvica (J&J, Abbvie) 348 15. Stribild (Gilead) 848 15. Jublia (Valeant) 325 16. Yervoy (BMS) 781 16. Pomalyst (Celgene) 305 17. Entyvio (Takeda) 721 17. Xgeva (Amgen) 285 18. Tivicay (GSK) 694 18. Cosentyx (Novartis) 261 19. Xtandi (Astellas) 686 19. Kadcyla (Roche) 253 20. Pomalyst (Celgene) 680 20. Stribild (Gilead) 250 24 EvaluatePharma® World Preview 2016 Year 2 WW Sales, $m Year 1 WW Sales, $m Copyright © 2016 Evaluate Ltd. All rights reserved. Top 20 Most Valuable R&D Projects (Ranked by Net Present Value) Roche’s Ocrevus and Sanofi’s dupilumab anticipated to be the most valuable projects in the pharmaceutical pipeline. If it is not surprising to see Roche topping the ranking of the most valuable R&D projects, what is news is the fact that the innovation is not coming from its established oncology pipeline. Ocrevus (ocrelizumab), an anti-CD20 MAb, is expected to reach close to $4bn in the challenging multiple sclerosis market by 2022. Dupilumab, Sanofi/Regeneron’s novel therapy for atopic dermatitis, is likely to face a less competitive environment in the first two years following launch (at least in terms of novel therapies), hence allowing enough time to navigate the market access landscape and consolidate a leading position within the clinical community. part 1 of 2 In the oncology market, Pfizer’s CDK inhibitor Ibrance, will be challenged by two novel therapies with simlar mechanisms of action, Novartis’ ribociclib and Eli Lilly’s abemaciclib. The sellside forecast of the latter product does not take into account the recent setback emerged from the interim read-out of the Monarch-2 study. High hopes are also placed on Alzheimer’s therapies, Eli Lilly’s solanezumab and Biogen’s aducanumab. It is also worth mentioning two products appearing in the top 20: Amgen’s ABP501, a biosimilar of the Abbvie’s megablockbuster Humira, and the first CAR-T cell therapy, Juno’s JCAR017. Overall, EvaluatePharma® consensus forecast estimates the additional sales expected from R&D projects to reach $169bn in 2022, about 50% of the total incremental sales during the 2016-2022 period. Top 20 Most Valuable R&D Projects (Ranked by Net Present Value) Source: EvaluatePharma® August 2016 Rank Product Company Phase (current) Pharmacological Class WW Product Sales ($m) 2022 Today’s NPV ($m) 1. Ocrevus Roche Filed Anti-CD20 MAb 3,962 2. Dupilumab Sanofi Phase III Anti-interleukin-4 (IL-4) & interleukin-13 (IL-13) MAb 3,725 12,884 3. Ozanimod Celgene Phase III Sphingosine-1-phosphate (S1P) 1 & 5 receptor modulator 2,112 9,458 4. Durvalumab AstraZeneca Phase III Anti-programmed death-1 ligand-1 (PD-L1) MAb 1,673 8,276 New entry 16,965 5. Abemaciclib Eli Lilly Phase III Cyclin-dependent kinase (CDK) 4 & 6 inhibitor 1,619 New entry 7,919** 6. Veliparib AbbVie Phase III Poly (ADP-ribose) polymerase (PARP) inhibitor 1,714 New entry 7,502 7. Semaglutide Novo Nordisk Phase III Glucagon-like peptide 1 (GLP-1) agonist 2,356 New entry 6,889 8. Aducanumab Biogen Phase III Anti-beta-amyloid (Abeta) MAb 939 New entry 6,889 9. LEE011 Novartis Phase III Cyclin-dependent kinase (CDK) 4 & 6 inhibitor 1,410 New entry 6,370 10. Emicizumab Roche Phase III Anti-factor IXa/X bispecific MAb 1,765 New entry 6,336 11. ABP 501 Amgen Filed Anti-tumour necrosis factor alpha (TNFa) MAb 810 New entry 6,273 12. Lanadelumab Shire Phase III Anti-plasma kallikrein MAb 1,064 New entry 5,915 13. Solanezumab Eli Lilly Phase III Anti-beta-amyloid (Abeta) MAb 1,556 5,577 14. Fovista Ophthotech Phase III Anti-platelet derived growth factor (PDGF)-B aptamer 1,973 5,514* 15. Apalutamide Johnson & Johnson Phase III Anti-androgen 1,160 New entry 5,366 16. Bictegravir/F/TAF Gilead Sciences Phase III Nucleoside reverse transcriptase inhibitor (NRTI) & HIV integrase inhibitor 3,489 New entry 5,276 17. Verubecestat Merck & Co Phase III Beta secretase cleaving enzyme (BACE) 1 inhibitor 1,480 New entry 5,219 18. JCAR017 Juno Therapeutics Phase II Anti-CD19 chimeric antigen receptor (CAR) T cell therapy 1,086 New entry 4,836 19. Mongersen Celgene Phase III Smad7 mRNA antisense 1,205 New entry 4,719 20. Sirukumab Johnson & Johnson Phase III Anti-interleukin-6 (IL-6) MAb 1,134 New entry 4,708 Top 20 36,232 142,893 Other 133,225 394,980 169,457 537,873 Total NPV of R&D Pipeline MAY 2015: 9% 492,827 Note: Abemaciclib’s forecast may have been adjusted downward by equity research analysts after this analysis went to press. The adjustment is due to the recent announcement that Abemaciclib failed to meet the criteria for an early Phase III halt, which suggests an early filing will not be possible. * Fovista assumed to be forecast on “best-case” basis and not fully adjusted for development risk ** NPV as of 19 Aug 2016 25 EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. Top 20 Most Valuable R&D Projects (Ranked by Net Present Value) part 2 of 2 Most Valuable R&D Projects (Ranked by NPV) in May 2015 Which Have Since Been Approved or Suffered Setbacks Source: EvaluatePharma® August2016 Change vs. May ‘15 Product Company Status (May 2015) Status Change Since May 2015 May 2015 NPV ($m) Today’s NPV ($m) Change vs. May 15 (%) Approved Tecentriq Roche Phase III Marketed 9,619 26,464 175% Repatha Amgen Filed Marketed 8,213 22,027 168% Entresto Praluent Novartis Filed Marketed 16,246 16,297 0% Sanofi Filed Marketed 4,967 11,530 132% Orkambi Vertex Pharmaceuticals Filed Marketed 16,037 9,979 -38% Ocaliva Intercept Pharmaceuticals Phase III Marketed 7,755 3,306 -57% Tagrisso AstraZeneca Phase III Marketed 5,376 9,234 72% Ninlaro Takeda Phase III Marketed 3,534 8,658 145% Venclexta AbbVie Phase III Marketed 4,386 8,768 100% Sub-Total 76,133 116,263 53% 0 0 n/m Sub-Total 0 0 n/m 76,133 116,263 53% Setback 1 Total Note: 1 None of the top 20 R&D projects listed in May 2015 have suffered a clinical setback over the past twelve months. 26 EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. Worldwide R&D Spend by Pharma & Biotech Companies (2008-2022) Worldwide pharmaceutical R&D spend to grow by 2.8% (CAGR) to $182bn in 2022. Increase in productivity signalled by decrease in spend per NME. rate of 1.7% between 2008 and 2015. The spend per NME, based on a three-year lag period between R&D expenditure and NME approval*, was $2.4bn per NME, the lowest for at least the past eight years. Such a trend signals a boost in R&D productivity as a result of more focused clinical development programmes and a growing collaboration between manufacturers and regulatory authorities to align on clinical trial design. EvaluatePharma® finds that worldwide pharmaceutical R&D totalled $149.8bn in 2015 representing an increase of 4.7% on the previous year. Looking forward, R&D spend is forecast to grow at a rate of 2.8% per year, compared with the compound annual growth Worldwide Total Pharmaceutical R&D Spend in 2008-2022 Source: EvaluatePharma® August 2016 +16% 180 140 120 133 138 130 129 138 137 100 +5.7% 80 +1.7% CAGR 2008-15 143 154 150 159 177 172 168 163 +14% +12% +2.8% CAGR 2015-22 +10% +8% +3.6% +4.7% +6% +2.6% 60 +3.4% +2.8% +2.5% +2.9% +2.7% +2.8% +4% +1.2% 40 +2% +0% +0.9% -3.0% 20 R&D Spend Growth (%) WW Pharma R&D Spend ($bn) 160 182 -0.7% -2% -4% 0 2008 2009 2010 2012 2011 2013 2014 2016 2015 2017 2019 2018 2020 Worldwide R&D Spend by Pharma & Biotech Companies (2008-2022) 2021 2022 Source: EvaluatePharma® August 2016 WW Prescription Sales ($bn) Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Pharma R&D Spend 132.9 129.0 130.1 137.5 136.5 138.2 143.1 149.8 153.8 159.0 163.4 167.5 172.3 177.0 182.0 -3.0% +0.9% +5.7% -0.7% +1.2% +3.6% +4.7% +2.6% +3.4% +2.8% +2.5% +2.9% +2.7% +2.8% 659 665 687 729 717 724 749 742 778 822 873 931 996 1,061 1,121 20.2% 19.4% 19.0% 18.9% 19.0% 19.1% 19.1% 20.2% 19.8% 19.3% 18.7% 18.0% 17.3% 16.7% 16.2% 53 53 59 65 66 69 74 73 80 86 92 97 103 109 115 606 613 627 663 651 655 675 669 698 736 782 834 893 952 1,006 21.9% 21.1% 20.7% 20.7% 21.0% 21.1% 21.2% 22.4% 22.0% 21.6% 20.9% 20.1% 19.3% 18.6% 18.1% Growth per Year WW Prescription (Rx) Sales R&D as % of WW Rx Sales Generics Rx excl. Generics R&D as % of Rx excl. Generics CAGR 15-22 on Pharma R&D Spend +2.8%. Cumulative 10 year R&D Spend (2006-15) $1,333bn. Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Number of NMEs 38 28 29 26 31 34 26 35 43 35 50 56 Spend per NME ($bn) 2.4 3.6 3.9 4.8 4.3 3.8 5.0 3.9 3.2 3.9 2.9 2.7 3.4 3.2 3.3 4.8 3.8 3.0 3.7 2.8 2.4 Spend per NME ($bn) (3 year lag)* Note: Industry sales based on Top 500 pharmaceutical and biotech companies. Forecast pharmaceutical research and development spend based on a consensus of leading equity analysts’ estimates for company level R&D spend, extrapolated to pharmaceutical R&D when a company has non-pharmaceutical R&D activity. *Spend per NME ($bn) (3 year lag) uses the R&D expense for 3 years prior to the NME approval instead of the same year. e.g. the 2015 figure of $2.4bn is the R&D expense in 2012 divided by the number of NMEs in 2015. 27 EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. Pharmaceutical R&D Spend in 2022: Top 20 Companies Roche forecast to be the biggest spender on pharmaceutical R&D in 2022. EvaluatePharma® finds that Roche will have overtaken Novartis to spend the most on research and development in 2022, with a spend of $9.9bn. Novartis is forecast to reduce its R&D spending, from $10.5bn in 2020 to only $9.2bn in 2022. Of the top 20, Celgene and Regeneron are forecast to grow their R&D expenses most rapidly, with R&D spend forecast to increase 11% per year until 2022. Overall, total R&D spend is expected to increase by 2.8% each year, reaching $182bn in 2022. Pharmaceutical R&D in 2022: Top 10 Companies Source: EvaluatePharma® August 2016 Pharma R&D Spend ($bn) 12.0 R&D Spend ($bn) 10.0 CAGR 2015-22 (%) 9.9 8.0 9.2 +2% +1% 6.0 8.0 7.8 +2% +0% 7.3 7.2 +4% +1% 4.0 5.8 5.7 +3% +0% 2.0 5.0 5.0 +3% +2% Bristol-Myers Squibb Eli Lilly 0.0 Roche Novartis Johnson & Johnson Pfizer Sanofi Merck & Co GlaxoSmithKline AstraZeneca Pharmaceutical R&D Spend (2015 & 2022): Top 20 Companies & Total Market Pharma R&D ($bn) Rank Company 1. Source: EvaluatePharma® August 2016 R&D As a % of Prescription Sales 2015 2022 CAGR 15-22 2015 2022 Chg. (+/-) Roche 8.5 9.9 +2% 21.8% 18.9% -2.9pp 2. Novartis 8.5 9.2 +1% 19.9% 17.4% -2.5pp 3. Johnson & Johnson 6.8 8.0 +2% 22.8% 20.0% -2.9pp 4. Pfizer 7.7 7.8 +0% 17.8% 15.9% -1.9pp 5. Sanofi 5.6 7.3 +4% 16.2% 16.0% -0.2pp 6. Merck & Co 6.6 7.2 +1% 18.8% 18.5% -0.3pp 7. GlaxoSmithKline 4.7 5.8 +3% 17.5% 17.9% +0.4pp 8. AstraZeneca 5.6 5.7 +0% 24.1% 18.9% -5.2pp 9. Bristol-Myers Squibb 4.0 5.0 +3% 27.9% 18.1% -9.8pp 10. Eli Lilly 4.5 5.0 +2% 28.2% 22.7% -5.5pp 11. Celgene 2.3 4.9 +11% 25.3% 19.2% -6.1pp 12. Boehringer Ingelheim 3.1 4.5 +6% 24.8% 24.7% -0.1pp 13. Amgen 3.9 4.5 +2% 18.7% 16.5% -2.2pp 14. AbbVie 3.6 4.4 +3% 15.9% 14.0% -1.9pp 15. Gilead Sciences 3.0 4.3 +5% 9.4% 14.8% +5.4pp 16. Novo Nordisk 2.0 3.5 +8% 12.6% 12.9% +0.3pp 17. Regeneron Pharmaceuticals 1.6 3.4 +11% 60.3% 65.7% +5.4pp 18. Takeda 2.9 3.3 +2% 24.1% 20.3% -3.8pp 19. Bayer 2.6 3.1 +3% 16.6% 15.8% -0.8pp 20. Biogen Total Top 20 2.0 2.7 +4% 21.9% 21.2% -0.7pp 89.6 109.4 +2.9% 20.2% 18.8% -1.4pp 13.4% 16.3% +2.9pp Other 60.2 72.6 +2.7% Total 149.8 182.0 +2.8% Note: Forecast pharmaceutical R&D spend based on a consensus of leading equity analysts’ estimates for company-level R&D spend. 28 EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. FDA New Drug Approval Analysis NMEs & Biologicals: (2001-2015) New drug approvals in 2015 reach a new record with 56 NMEs, topping 2014 high. part 1 of 2 new approvals. In 2015 the top NMEs include Pfizer’s Ibrance, J&J’s Darzalex and Gilead’s Genvoya with a cumulative value of $32bn of sales expected in 2020. The increasing number of breakthrough therapy approvals also prove the ability of the pharmaceutical R&D to offer incremental benefits to targeted patient segments with larger unmet needs. The approval of 56 NMEs by the FDA in 2015 beats the previous record registered in 2014 (50 NMEs) and confirms the increasing productivity of the pharmaceutical pipeline. Besides the number of products approved, a key indicator is represented by the value (calculated as USA sales expected five years after launch) of the FDA Approval Count vs. Total USA Product Sales 5 Years After Launch Source: EvaluatePharma® August 2016 56 60 50 30 50 43 25 20 38 35 32 28 26 29 31 35 34 40 35 26 26 30 15 20 10 No. of New Drugs USA Product Sales 5 Years After Launch ($bn) 35 10 5 8.5 12.7 8.3 14.1 6.4 9.2 4.3 5.6 5.4 13.5 11.4 13.6 16.0 27.1 32.4 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 0 0 No. of NMEs Approved USA Sales 5yrs Post Launch ($bn) Average 5th Year USA Sales Potential: $12.6bn Key Approvals in Top 6 Years 2002 – Neulasta (AMGN), Abilify (Otsuka/BMS), Zetia (MRK/SGP), Humira (ABT) 2013 – Tecfidera (BIIB), Imbruvica (ABBV), Invokana (JNJ) 2004 – Avastin (Roche), Cymbalta (LLY), Spiriva (BI/PFE), Lyrica (PFE) 2014 – Opdivo (BMY), Harvoni (GILD), Keytruda (MRK) 2012 – Eliquis (BMY/PFE), Xtandi (Astellas), Perjeta (Roche), Strilbid (GILD) 2015 – Ibrance (PFE), Genvoya (GILD), Entresto (NVS) FDA Approval Count (NMEs & Biologicals) vs. 5th Year after Launch USA Product Sales Year No. of NMEs Approved No. of Biologicals Approved Total NMEs + Biologicals 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 24 17 21 31 18 18 16 21 19 15 24 33 25 30 32 8 9 14 7 10 11 10 10 15 11 11 10 10 20 24 32 % Chg. USA Sales 5yrs Post Launch $bn 8.5 % Chg. 5yr USA Sales per Approval $m % Chg. Source: EvaluatePharma® August 2016 264 26 35 38 28 29 26 31 34 26 35 43 35 50 56 -19% +35% +9% -26% +4% -10% +19% +10% -24% +35% +23% -19% +43% +12% 12.7 8.3 14.1 6.4 9.2 4.3 5.6 5.4 13.5 11.4 13.6 16.0 27.1 32.4 +50% -34% +69% -55% +44% -53% +28% -3% +148% -16% +20% +17% +69% +19% 487 238 371 228 316 167 180 160 519 325 317 458 542 578 +84% -51% +56% -39% +39% -47% +8% -11% +225% -37% -2% +44% +19% +7% Note: The number of biologicals approved include biologicals from both CDER and CBER. In 2015 there were 13 CDER biologicals approved and EvaluatePharma estimates that there were 11 CBER biologicals approved: Vonvendi, Fluad, Adynovate, Imlygic, Nuwiq, Anavip, Raplixa, Ixinity, Quadracel, Anthrasil, Bexsero. 29 EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. FDA New Drug Approval Analysis NMEs & Biologicals: (2001 to 2015) Top 10 New Molecular Entities in 2015: Ranked on USA Consensus Sales in 2020 part 2 of 2 Source: EvaluatePharma® August 2016 USA Sales ($m) Rank Product Company Approved Review Status 2015 2020 1. Ibrance Pfizer Feb 2015 Breakthrough therapy 718 3,297 2. Genvoya Gilead Sciences Nov 2015 Standard 44 2,512 3. Entresto Novartis Jul 2015 Priority review 21 2,104 4. Orkambi Vertex Pharmaceuticals Jul 2015 Breakthrough therapy 351 1,992 5. Repatha Amgen Aug 2015 Standard 7 1,838 6. Cosentyx Novartis Jan 2015 Standard 220 1,809 7. Darzalex Johnson & Johnson Nov 2015 Breakthrough therapy 9 1,802 8. Tresiba Novo Nordisk Sep 2015 Standard - 1,542 9. Praluent Sanofi Jul 2015 Priority review 10 1,331 10. Rexulti Otsuka Holdings Jul 2015 Standard 38 1,219 684 12,934 2,102 32,381 Other Total Note: Sales forecasts based on a consensus of leading equity analysts’ estimates. 5th year USA sales for products approved up to the end of 2010 are based on actual company reported sales. Darzalex, Cosentyx, Repatha USA sales figures for 2015 are estimated. 30 EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. Worldwide Prescription Drug & OTC Sales by Therapy Area in 2022 Oncology still the fastest growing therapy area with a +12.5% CAGR during the 2016-22 period. part 1 of 2 growth drivers and brakes in the HIV and hepatitis C markets. Anti-diabetics is forecast to be the second biggest therapy area with sales of $66.1bn in 2022, less than half that of oncology. EvaluatePharma® finds that oncology will remain the largest segment in 2022 with an expected annual growth of 12.5% per year, reaching $190.0bn in sales in 2022. Oncology growth through to 2022 is driven by Opdivo and Revlimid with contributions from the expected launches of durvalumab and Tecentriq to compensate for a number of key patent expires between 2015 and 2022. The stagnant growth of anti-virals is the result of a balance between The upcoming launches of dupilumab and onazimod are expected to fuel the growth of the immunosuppressants segment which is expected to grow at a 12.8% CAGR during the 2016-22 period. Sustained growth is also expected in the anti-cogulants market driven by the performance of Xarelto (Bayer/J&J), Eliquis (BMS) and Savaysa (Daiichi-Sankyo). Top 10 Therapy Areas in 2022, Market Share & Sales Growth Source: EvaluatePharma® August 2016 20% Oncology 18% WW Market Share (%) 16% 14% 12% Key growth drivers: Key growth drivers: Descovy, (GILD), Genvoya (GILD), Bictegravir/F/TAF (GILD), Triumeq (GSK) Opdivo (BMY), Revlimid (CELG), Keytruda (MRK), Ibrance (PFE), Perjeta (Roche), Tecentriq (Roche) Key growth brakes: Key patent expiries: Harvoni (GILD), Sovaldi (GILD), Truvada (GILD), Atripla (GILD) Gleevec (Novartis) 2016; Rituxan (Roche) 2016+, Alimta (LLY) 2015+; Herceptin (Roche) 2014+ 10% Key contributors to CAGR growth: Stelara (JNJ); dupilumab (SAN) – expected 2017 WW launch; Ozanimod (CELG) - expected 2018 launch Anti-diabetics 8% Anti-rheumatics 6% Anti-virals Bronchodilators 4% 2% Anti-hypertensives Vaccines MS therapies 0% Dermatologicals Sensory Organs Immunosuppressants -2% -4% -2% +0% +2% +4% +6% +8% +10% +12% +14% +16% % Sales Growth: CAGR 2015-22 Worldwide Prescription Drug & OTC Sales by EvaluatePharma® Therapy Area (2015 & 2022): Top 15 Categories & Total Market WW Sales ($bn) Rank Therapy Area 1. Source: EvaluatePharma® August 2016 CAGR WW Market Share Rank 2015 2022 % Growth 2015 2022 Chg. (+/-) Chg. (+/-) Oncology 83.2 190.0 +12.5% 10.7% 16.3% +5.6pp +0 2. Anti-diabetics 41.7 66.1 +6.8% 5.4% 5.7% +0.3pp +2 3. Anti-rheumatics 48.8 54.5 +1.6% 6.3% 4.7% -1.6pp +0 4. Anti-virals 50.7 50.9 +0.0% 6.5% 4.4% -2.2pp -2 5. Vaccines 27.6 39.0 +5.1% 3.5% 3.4% -0.2pp +1 6. Bronchodilators 30.2 34.7 +2.0% 3.9% 3.0% -0.9pp -1 7. Sensory Organs 19.8 33.3 +7.7% 2.6% 2.9% +0.3pp +2 8. Anti-hypertensives 25.7 26.5 +0.4% 3.3% 2.3% -1.0pp -1 9. Dermatologicals 12.1 24.3 +10.4% 1.6% 2.1% +0.5pp +3 10. MS therapies 20.2 23.2 +2.0% 2.6% 2.0% -0.6pp -2 Top 1 1-15 continued over… 31 EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. Worldwide Prescription Drug & OTC Sales by Therapy Area in 2022 part 2 of 2 Source: EvaluatePharma® August 2016 WW Sales ($bn) Rank Therapy Area 11. Immunosuppressants 12. Anti-coagulants 13. Anti-hyperlipidaemics 14. 15. CAGR WW Market Share Rank 2015 2022 % Growth 2015 2022 Chg. (+/-) Chg. (+/-) 9.5 22.1 +12.8% 1.2% 1.9% +0.7pp +6 11.9 20.3 +8.0% 1.5% 1.7% +0.2pp +1 15.4 18.2 +2.4% 2.0% 1.6% -0.4pp -3 Anti-bacterials 12.4 16.9 +4.5% 1.6% 1.4% -0.2pp -3 Anti-fibrinolytics 11.1 15.8 +5.2% 1.4% 1.4% -0.1pp +0 Top 15 420 636 +6.1% 54.1% 54.6% +0.5pp Other 356 529 +5.8% 45.9% 45.4% -0.5pp Total WW Prescription & OTC Sales 776 1,164 +6.0% 100.0% 100.0% WW Generic Sales 73.1 114.8 +6.7% 9.4% 9.9% +0.4% OTC Pharmaceuticals 34.7 43.5 +3.3% 4.5% 3.7% -0.7% Total 'Prescription & OTC Sales' includes: Note: Industry sales based on Top 500 pharmaceutical and biotech companies. Sales in 2015 based on company reported data. Sales forecasts to 2022 based on a consensus of leading equity analysts’ estimates for product sales and segmental sales. 32 EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. Oncology Market to 2022 part 1 of 2 Roche remains ahead of the field but its growth set to fade following the launch of biosimilars. sales forecasted to reach approximately $6bn in 2022. Additionally, Keytruda may be primed for even more growth after Bristol-Myers Squibb’s Opdivo failed to hit first-line treatment goals in a recent lung cancer study. Not to be left behind, Abbvie is acquiring its way into the marketplace with a big bet on Pharmacyclics and their key drug Imbruvica and most recently, Stemcentrx and their candidate Rova-T. Overall, the foundation of the market of established drugs launched prior to 2013 is expected to only slightly increase with recent and newly launched drugs driving growth by an estimated 13% (CAGR) to $190bn. Roche’s pre-eminence is expected to diminish with an estimated 14% decline in market share through 2022. The market-leader struggles with a compound annual growth rate of 3% as opposed to an average of 17% amongst the rest of its peers within the top ten. This lackluster growth rate is likely due to the impact of biosimilars cannibalising sales of its core products, including Avastin, Herceptin and Rituxan. If forecasts hold, Keytruda, an anti-programmed cell death protein 1 (PD-1) drug will catapult Merck & Co into the top 10 with worldwide Worldwide Sales, Market Share & Sales Growth (2015-2022) Source: EvaluatePharma® August 2016 25% Roche WW Market Share (%) 20% 15% Celgene 10% Novartis Bristol-Myers Squibb Johnson & Johnson AbbVie Merck & Co 5% AstraZeneca Pfizer Eli Lilly 0% +0% +5% +10% +15% +20% +25% +30% +35% % Sales Growth: CAGR 2015-22 Note: Bubble = WW Sales in 2022 Top 10 Companies & Total Worldwide Oncology Sales (2015-2022) WW Sales ($m) Rank Company 1. Roche 2. Celgene 3. Bristol-Myers Squibb 4. Novartis 5. Pfizer 6. Johnson & Johnson 7. 25,707 8,597 WW Market Share Rank Chg. 2015 2022 32,206 +3% 30.9% 17.0% - 18,680 +12% 10.3% 9.8% +1 4,499 16,397 +20% 5.4% 8.6% +1 10,357 11,889 +2% 12.5% 6.3% -3 3,392 9,723 +16% 4.1% 5.1% - 4,068 11,918 +17% 4.9% 6.3% +1 AstraZeneca 2,825 8,807 +18% 3.4% 4.6% +1 8. AbbVie 1,485 8,406 +28% 1.8% 4.4% +4 9. Eli Lilly 2,989 5,806 +10% 3.6% 3.1% -3 +8 Merck & Co 2022 CAGR 2015-22 10. 2015 Source: EvaluatePharma® August 2016 920 6,195 +31% 1.1% 3.3% Top 10 64,839 130,026 +10% 77.9% 68.4% Other 18,342 59,959 +18% 22.1% 31.6% Total Industry 83,181 189,985 +13% 100.0% 100.0% 2015-22 Note: Opdivo’s forecast may have been adjusted downward by equity research analyst while this paper went to press. The adjustment is due to the recent failure of Opdivo in a Phase III study for use in first line in advanced NSCLC. 33 EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. Oncology Market to 2022 part 2 of 2 Top 5 Oncology Products Worldwide in 2022 Source: EvaluatePharma® August 2016 WW Sales ($m) CAGR WW Market Share Current Rank Product Generic Name Company Pharma Class 2015 2022 2015-22 2015 2022 Status 1. Opdivo nivolumab Bristol-Myers Squibb + Ono Pharmaceutical Anti-programmed death-1 (PD-1) MAb 1,119 14,634* +44% 1.3% 7.7% Marketed 2. Revlimid lenalidomide Celgene Immunomodulator 5,801 13,024 +12% 7.0% 6.9% Marketed 3. Imbruvica ibrutinib AbbVie + Johnson & Johnson + Pharmacyclics Bruton's tyrosine kinase (BTK) inhibitor 1,299 7,287 +28% 1.6% 3.8% Marketed 4. Keytruda pembrolizumab Merck & Co Anti-programmed death-1 (PD-1) MAb 566 5,959 +40% 0.7% 3.1% Marketed 5. Ibrance palbociclib Pfizer Cyclin-dependent kinase (CDK) 4 & 6 inhibitor 723 5,709 +34% 0.9% 3.0% Marketed Note: *Opdivo’s forecast may have been adjusted downward by equity research analysts after this analysis went to press. The adjustment is due to the recent failure of Opdivo in a key Phase III study for use in first line in advanced NSCLC. Oncology includes: Alkaloids, Alkylating agents, Anti-metabolites, Anti-neoplastic MAbs, Cytotoxic antibiotics, Hormone therapies, Platinum compounds and other anti-cancer. Excludes anti-emetics and anti-anaemics used in chemotherapy-induced anaemia. Also excludes: Interferons, Immunostimulants & Immunosuppressants. Top 5 Oncology R&D Products Worldwide in 2022 Rank Product Generic Name Company Pharma Class 1. Durvalumab durvalumab AstraZeneca + Celgene 2. Veliparib veliparib 3. Abemaciclib abemaciclib 4. LEE011 5. PB272 Source: EvaluatePharma® August 2016 WW Sales ($m) 2022 WW Market Share 2022 Anti-programmed death-1 ligand-1 (PD-L1) MAb 1,911 1.0% Phase II & III AbbVie Poly (ADP-ribose) polymerase (PARP) inhibitor 1,714 0.9% Phase III Eli Lilly Cyclin-dependent kinase (CDK) 4 & 6 inhibitor 1,619 0.9% Phase III ribociclib Novartis Cyclin-dependent kinase (CDK) 4 & 6 inhibitor 1,410 0.7% Phase III neratinib Puma Biotechnology Pan-HER (ErbB) inhibitor 1,363 0.7% Filed Product Segment Contribution to Sales in 2022 Source: EvaluatePharma® August 2016 200 WW Sales ($bn) 150 100 Status $52.0bn $190.0bn New Launches 2022 Sales $54.5bn $83.2bn $0.3bn 2015 Sales Established 50 0 34 EvaluatePharma® World Preview 2016 Recently Launched Copyright © 2016 Evaluate Ltd. All rights reserved. Anti-Diabetics Market to 2022 Novo Nordisk expected to remain the major player in 2022; Sanofi to lose market share; Boehringer Ingelheim climbs the charts. EvaluatePharma® finds that Novo Nordisk is expected to maintain its dominance in the anti-diabetic market through 2022. Novo’s sales are forecast to grow by 9% per annum to $22.9bn in 2022, representing a 34.7% share of the market. Sanofi, with anti-diabetic sales of $7.70bn in 2022, is a long way behind in second place part 1 of 2 as biosimilar competition to its long-acting insulin Lantus and the entry of new competitors into the space is expected to reduce its market share from 20.0% in 2015 to 11.7% in 2022. Jardiance, launched in 2014, proves a game changer for Boehringer Ingelheim; market share rockets from 2.8% in 2015 to 8.6% in 2022 with an unparalleled 26% CAGR. Worldwide Sales, Market Share & Sales Growth (2015-2022) Source: EvaluatePharma® August 2016 45% 40% 35% WW Market Share (%) 30% Novo Nordisk 25% 20% Eli Lilly 15% Sanofi Boehringer Ingelheim Merck & Co 10% Johnson & Johnson 5% Novartis Bayer 0% AstraZeneca Takeda -5% -5% +0% +5% +10% +15% +20% +25% +30% +35% % Sales Growth: CAGR 2015-22 Note: Bubble = WW Sales in 2022 Top 10 Companies & Total Worldwide Anti-Diabetic Sales (2015-2022) WW Sales ($m) Rank Company 1. Novo Nordisk 2. Source: EvaluatePharma® August 2016 CAGR WW Market Share Rank Chg. 2015 2022 2015-22 2015 2022 2015-22 12,662 22,909 +9% 30.4% 34.7% +0 Sanofi 8,331 7,698 -1% 20.0% 11.7% +0 3. Merck & Co 6,044 6,120 +0% 14.5% 9.3% -1 4. Eli Lilly 4,418 7,669 +8% 10.6% 11.6% +1 5. AstraZeneca 2,219 4,663 +11% 5.3% 7.1% -1 6. Johnson & Johnson 1,308 3,314 +14% 3.1% 5.0% -1 7. Novartis 1,220 1,036 -2% 2.9% 1.6% -2 8. Boehringer Ingelheim 1,147 5,688 +26% 2.8% 8.6% +3 9. Takeda 796 1,160 +6% 1.9% 1.8% +1 10. Bayer 597 641 +1% 1.4% 1.0% -1 Top 10 38,742 60,899 +7% 93.0% 92.2% Other 2,935 5,151 +8% 7.0% 7.8% 41,677 66,050 +7% 100.0% 100.0% Total Industry 35 EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. Anti-Diabetics Market to 2022 part 2 of 2 Top 5 Anti-Diabetic Products Worldwide in 2022 Source: EvaluatePharma® August 2016 WW Sales ($m) CAGR WW Market Share Current Rank Product Generic Name Company Pharma Class 2015 2022 2015-22 2015 2022 1. Januvia/ Janumet sitagliptin phosphate Merck & Co, Ono, Daewoong, Sigma-Tau, Almirall Dipeptidyl peptidase IV inhibitor 6,333 5,913 -1.0% 15.2% 9.0% Marketed 2. Victoza liraglutide [rDNA origin] Novo Nordisk Glucagon-like peptide 1 (GLP-1) agonist 2,682 4,133 +6.4% 6.4% 6.3% Marketed 3. Jardiance empagliflozin Boehringer Ingelheim Sodium-glucose cotransporter-2 (SGLT2) inhibitor 118 3,932 +65.0% 0.3% 6.0% Marketed 4. Invokana canagliflozin Johnson & Johnson Sodium-glucose cotransporter-2 (SGLT2) inhibitor 1,308 3,314 +14.2% 3.1% 5.0% Marketed 5. NovoRapid insulin aspart Novo Nordisk Insulin analogue 3,082 2,976 -0.5% 7.4% 4.5% Marketed Top 5 Anti-Diabetic R&D Products Worldwide in 2022 Rank Product Generic Name Company Pharma Class 1. Semaglutide semaglutide Novo Nordisk 2. Faster-acting Insulin Aspart insulin aspart 3. LixiLan 4. 5. Status Source: EvaluatePharma® August 2016 WW Sales ($m) 2022 WW Market Share 2022 Current Status Glucagon-like peptide 1 (GLP-1) agonist 2,356 3.6% Phase III Novo Nordisk Insulin analogue 1,054 1.6% Filed insulin glargine; lixisenatide Sanofi Glucagon-like peptide 1 (GLP-1) agonist & insulin analogue 966 1.5% Filed Saxadapa FDC dapagliflozin propanediol; saxagliptin hydrochloride AstraZeneca Dipeptidyl peptidase IV (DPP-IV) inhibitor & sodium-glucose co-transporter 2 (SGLT2) inhibitor 476 0.7% Filed MK-1293 insulin glargine Merck & Co Insulin analogue 309 0.5% Filed Product Segment Contribution to Sales in 2022 Source: EvaluatePharma® August 2016 80,000 $66,050m New Launches 2022 Sales $18,511m 60,000 WW Sales ($m) $7,280m $41,677m 40,000 -$1,419m 20,000 0 2015 Sales 36 EvaluatePharma® World Preview 2016 Established Recently Launched Copyright © 2016 Evaluate Ltd. All rights reserved. Anti-Rheumatics Market to 2022 Abbvie continues to dominate anti-rheumatics market in 2022; J&J’s Remicade is forecast to lose market share. AbbVie retained its number one position as the top anti-rheumatic company in 2015 and is forecast to remain market leader in 2022, with an expected market share of 24.4%. Humira is still forecast to be the best-selling anti-rheumatic product, despite the imminent threat of biosimilar competition. Recent clinical trial results have demonstrated barcitinib’s superiority to Humira in treating the signs and symptoms of rheumatoid arthritis, which may be why baricitinib part 1 of 2 is projected to be the most successful R&D product in 2022. ABP 501 is also likely to erode Humira sales in the future, with Amgen expecting FDA approval for the biosimilar in late September. Another product facing competitive pressure is J&J’s Remicade – whose market share is expected to reduce dramatically, from 16.7% in 2015 to just 6.7% in 2022. The anti-rheumatics market continues to be a low growth market at just 2% per year (CAGR) to $54.5bn in 2022. The low growth rate is due to the price erosion caused by the anticipated entry of biosimilars. Worldwide Sales, Market Share & Sales Growth (2015-2022) Source: EvaluatePharma® August 2016 30% AbbVie WW Market Share (%) 25% 20% Johnson & Johnson 15% 10% Merck & Co Pfizer 5% Amgen Bristol-Myers Squibb UCB Celgene 0% Roche -5% -10% -5% +0% +5% +10% +15% +20% +25% +30% +35% +40% % Sales Growth: CAGR 2015-22 Note: Bubble = WW Sales in 2022 Top 10 Companies & Total Worldwide Anti-Rheumatic Sales 2015-22 WW Sales ($m) Rank Company 1. AbbVie 2. Source: EvaluatePharma® August 2016 CAGR WW Market Share Rank Chg. 2015 2022 2015-22 2015 2022 2015-22 14,012 13,303 -1% 28.7% 24.4% +0 Johnson & Johnson 7,307 6,486 -2% 15.0% 11.9% +0 3. Amgen 5,364 6,431 +3% 11.0% 11.8% +1 4. Pfizer 5,667 5,408 -1% 11.6% 9.9% -1 5. Celgene 472 3,128 +31% 1.0% 5.7% +10 6. Bristol-Myers Squibb 1,885 2,065 +1% 3.9% 3.8% +0 7. Eli Lilly* 0.0% 3.3% 8. Merck & Co 2,955 1,520 -9% 6.0% 2.8% -3 9. UCB 1,202 1,517 +3% 2.5% 2.8% -1 10. Roche 1,258 1,345 +1% 2.6% 2.5% -3 Top 10 40,122 43,010 +1% 82.1% 78.9% 8,727 11,510 +4% 17.9% 21.1% 48,849 54,519 +2% 100.0% 100.0% Other Total Industry 1,807 Note: *Eli Lilly had no marketed anti-rheumatics in 2015 37 EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. Anti-Rheumatics Market to 2022 part 2 of 2 Top 5 Anti-Rheumatic Products Worldwide in 2022 Source: EvaluatePharma® August 2016 WW Sales ($m) Rank Product Generic Name Company Pharma Class 1. Humira adalimumab AbbVie + Eisai 2. Enbrel etanercept 3. Remicade 4. 5. CAGR WW Market Share Current 2015 2022 2015-22 2015 2022 Status Anti-tumour necrosis factor alpha (TNFa) MAb 14,359 13,645 -1% 29.4% 25.0% Marketed Amgen + Pfizer + Takeda Tumour necrosis factor alpha (TNFa) inhibitor 9,037 7,177 -3% 18.5% 13.2% Marketed infliximab Johnson & Johnson + Merck & Co + Mitsubishi Tanabe Pharma Anti-tumour necrosis factor alpha (TNFa) MAb 8,151 3,635 -11% 16.7% 6.7% Marketed Simponi golimumab Johnson & Johnson + Merck & Co Anti-tumour necrosis factor alpha (TNFa) MAb 2,018 3,139 +7% 4.1% 5.8% Marketed Otezla apremilast Celgene Phosphodiesterase IV (PDE4) inhibitor 472 3,128 +31% 1.0% 5.7% Marketed Note: Anti-tumour necrosis factor alpha (TNFa) inhibitor sales include RA, Crohn’s and Psoriasis. Top 5 R&D Anti-Rheumatic Products Worldwide in 2022 Rank Product Generic Name Company Pharma Class 1. Baricitinib baricitinib Eli Lilly 2. Sirukumab sirukumab 3. ABP 501 4. 5. Source: EvaluatePharma® August 2016 WW Sales ($m) 2022 WW Market Share 2022 Janus kinase (JAK)-1/2 inhibitor 1,807 3.3% Filed Johnson & Johnson Anti-interleukin-6 (IL-6) MAb 1,134 2.1% Phase III adalimumab Amgen Anti-tumour necrosis factor alpha (TNFa) MAb 810 1.5% Filed Sarilumab sarilumab Sanofi Anti-interleukin-6 receptor (IL-6R) MAb 799 1.5% Filed Mavrilimumab mavrilimumab AstraZeneca Anti-granulocyte macrophage colony-stimulating factor receptor (GM-CSFR) MAb 235 0.4% Phase II Product Segment Contribution to Sales in 2022 Current Status Source: EvaluatePharma® August 2016 WW Sales ($bn) 60 $48.8bn -$4.3bn 2015 Sales Established $7.5bn $54.5bn New Launches 2022 Sales $2.5bn 40 20 0 38 EvaluatePharma® World Preview 2016 Recently Launched Copyright © 2016 Evaluate Ltd. All rights reserved. Vaccines Market to 2022 part 1 of 2 GSK gains market leadership following deal with Novartis. Pfizer’s Prevnar-13 remains top selling product. moderate growth rate through 2022. Novavax enters the top 10 and is expected to be one of the largest growth contributors with the launch of two new vaccines, and reach over $2bn in worldwide sales by 2022. Following the acquisition of Novartis’ flu vaccines, CSL’s share of the global vaccine market is expected to be 3.4% in 2022. GlaxoSmithKline has emerged as the market leader in the vaccines market following the completion of its transaction with Novartis to swap its oncology assets to gain Novartis’ vaccines portfolio. Behind GSK, Sanofi, Pfizer and Merck are expected to maintain a Worldwide Sales, Market Share & Sales Growth (2015-2022) Source: EvaluatePharma® August 2016 30% GlaxoSmithKline WW Market Share (%) 25% Pfizer 20% 15% Sanofi + 50% Sanofi Pasteur MSD Merck & Co + 50% Sanofi Pasteur MSD 10% Mitsubishi Tanabe Pharma 5% CSL Emergent BioSolutions Astellas Pharma 0% -5% +0% +1% +2% +3% +4% +5% +6% +7% +8% +9% % Sales Growth: CAGR 2015-22 Note: Bubble = WW Sales in 2022 Top 10 Companies & Total Worldwide Vaccine Sales 2015-2022 WW Sales ($m) Source: EvaluatePharma® August 2016 CAGR WW Market Share Rank Chg. Rank Company 2015 2022 2015-22 2015 2022 2015-22 1. GlaxoSmithKline 5,588 8,553 +6% 20.3% 21.9% +3 2. Sanofi + 50% Sanofi Pasteur MSD 5,724 8,295 +5% 20.8% 21.2% +1 3. Pfizer 6,439 7,430 +2% 23.4% 19.0% -2 4. Merck & Co + 50% Sanofi Pasteur MSD 6,177 7,238 +2% 22.4% 18.5% -2 5. Novavax - 2,107 6. CSL 1,150 1,323 +2% 4.2% 3.4% -1 7. Emergent BioSolutions 294 507 +8% 1.1% 1.3% +1 8. Mitsubishi Tanabe Pharma 389 426 +1% 1.4% 1.1% -2 9. Astellas Pharma 338 409 +3% 1.2% 1.0% -2 10. Dynavax Technologies - 406 Top 10 26,099 36,694 +5% 94.7% 94.0% Other 1,454 2,343 +7% 5.3% 6.0% 27,553 39,037 +5% 100.0% 100.0% Total Industry 39 EvaluatePharma® World Preview 2016 5.4% 1.0% Copyright © 2016 Evaluate Ltd. All rights reserved. Vaccines Market to 2022 part 2 of 2 Top 5 Vaccine Products Worldwide in 2022 Source: EvaluatePharma® August 2016 WW Sales ($m) CAGR WW Market Share Current Rank Product Generic Name Company 2015 2022 2015-22 2015 2022 Status 1. Prevnar 13 pneumococcal vaccine Pfizer + Daewoong Pharmaceutical 6,328 6,069 -1% 23.0% 15.5% Marketed 2. Gardasil human papillomavirus (HPV) vaccine Merck + Sanofi Pasteur MSD + CSL 2,157 2,476 +2% 7.8% 6.3% Marketed 3. Fluzone influenza vaccine Sanofi + Sanofi Pasteur MSD 1,595 2,015 +3% 5.8% 5.2% Marketed 4. Pentacel DTPa, Hib & polio vaccine Sanofi 1,496 1,754 +2% 5.4% 4.5% Marketed 5. Pediarix DTP, hepatitis B & polio vaccine GlaxoSmithKline 1,120 1,322 +2% 4.1% 3.4% Marketed Note: Sanofi Pasteur MSD is a European joint venture between Merck & Co and Sanofi. Top 5 Vaccine R&D Products Worldwide in 2022 Source: EvaluatePharma® August 2016 Rank Product Generic Name Company 1. Combination Respiratory Vaccine influenza vaccine & respiratory syncytial virus (RSV) vaccine Novavax 2. Shingrix herpes zoster vaccine GlaxoSmithKline WW Sales ($m) 2022 WW Market Share 2022 Status 1,066 2.7% Pre-clinical 970 2.5% Phase III 3. RSV F Vaccine respiratory syncytial virus (RSV) vaccine Novavax 845 2.2% Phase III 4. PF-06290510 staphylococcus aureus vaccine Pfizer 489 1.3% Phase II 5. Heplisav-B hepatitis B vaccine Dynavax Technologies 419 1.1% Filed Product Segment Contribution to Sales in 2022 Source: EvaluatePharma® August 2016 40 WW Sales ($bn) 30 $26.4bn $1.9bn $5.1bn $34.7bn New Launches 2022 Sales $1.2bn 20 10 0 2015 Sales 40 EvaluatePharma® World Preview 2016 Established Recently Launched Copyright © 2016 Evaluate Ltd. All rights reserved. Anti-Virals Market to 2022 part 1 of 3 Gilead continues to dominate anti-viral market in 2022. appears to dominate the R&D sector contributing over $7bn in 2022, with Bictegravir/F/TAF as the leading product. Roche sales are forecast to drop by approximately 70% in 2022, primarily due to declining Tamiflu and Valcyte sales hit by increased competition from GSK’s Relenza and Valcyte generics. EvaluatePharma finds that Gilead will continue to command over 50% of the anti-virals market in 2022. Gilead’s success in this area is largely due to its hepatitis C and HIV franchise, which are collectively forecast to contribute over $27bn to 2022 worldwide anti-viral sales, with Harvoni being the top seller. Gilead also ® Worldwide Sales, Market Share & Sales Growth (2015-2022) Source: EvaluatePharma® August 2016 70% 60% Gilead Sciences WW Market Share (%) 50% 40% 30% 20% Johnson & Johnson Bristol-Myers Squibb -40% -20% Roche GlaxoSmithKline 10% AbbVie 0% +0% Merck & Co Arrowhead Pharmaceutical Sino Biopharmaceutical Aurobindo Pharma +20% +40% +60% +80% +100% +120% % Sales Growth: CAGR 2015-22 Note: Bubble = WW Sales in 2022 Top 10 Companies & Total Worldwide Anti-viral Sales 2015-22 WW Sales ($m) Rank Company 1. Source: EvaluatePharma® August 2016 CAGR WW Market Share Rank Chg. 2015 2022 2015-22 2015 2022 2015-22 Gilead Sciences 30,190 27,924 -1% 59.5% 54.9% +0 2. GlaxoSmithKline 4,365 7,762 +9% 8.6% 15.3% +0 3. Merck & Co 1,665 4,193 +14% 3.3% 8.2% +3 4. Johnson & Johnson 3,166 2,091 -6% 6.2% 4.1% +1 5. AbbVie 3,334 2,088 -6% 6.6% 4.1% -1 6. Sino Biopharmaceutical 863 1,802 +11% 1.7% 3.5% +2 7. Bristol-Myers Squibb 4,214 1,233 -16% 8.3% 2.4% -4 8. Arrowhead Pharmaceuticals - 480 n/m - 0.9% New 9. Aurobindo Pharma 183 400 +12% 0.4% 0.8% +2 10. Roche 1,187 318 -17% 2.3% 0.6% -3 Top 10 49,167 48,291 -0% 96.9% 94.9% Other 1,547 2,573 +8% 3.1% 5.1% 50,714 50,864 +0% 100.0% 100.0% Total Industry 41 EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. Anti-Virals Market to 2022 part 2 of 3 Top 5 Anti-viral Products Worldwide in 2022 Source: EvaluatePharma® August 2016 WW Sales ($m) Rank Product Generic Name Company Pharma Class 1. Harvoni ledipasvir; sofosbuvir Gilead Sciences Hepatitis C nucleoside NS5A & NS5B polymerase inhibitor 2. Triumeq abacavir sulfate; dolutegravir sodium; lamivudine GlaxoSmithKline 3. Descovy emtricitabine; tenofovir alafenamide 4. Genvoya 5. Bictegravir/ F/TAF CAGR Current 2022 2015-22 2015 2022 13,864 4,531 -15% 27.3% 8.9% Marketed Nucleoside reverse transcriptase inhibitor (NRTI) & HIV integrase inhibitor 1,116 4,449 +22% 2.2% 8.7% Marketed Gilead Sciences Nucleoside reverse transcriptase inhibitor (NRTI), CYP3A inhibitor & protease inhibitor - 4,343 n/m - 8.5% Marketed cobicistat; elvitegravir; emtricitabine; tenofovir alafenamide fumarate Gilead Sciences Nucleoside reverse transcriptase inhibitor (NRTI), HIV integrase inhibitor & CYP3A inhibitor 45 3,731 +88% 0.1% 7.3% Marketed bictegravir sodium; emtricitabine; tenofovir alafenamide fumarate Gilead Sciences Nucleoside reverse transcriptase inhibitor (NRTI) & HIV integrase inhibitor - 3,489 n/m - 6.9% Phase III Top 5 R&D Anti-viral Products Worldwide in 2022 Product Generic Name Company Pharma Class 1. Bictegravir/ F/TAF bictegravir sodium; emtricitabine; tenofovir alafenamide fumarate Gilead Sciences 2. Cobicistat/ Emtriva/ GS 7340/ Prezista STR cobicistat; darunavir; emtricitabine; tenofovir alafenamide fumarate 3. Tenofovir Alafenamide 4. 5. Status Source: EvaluatePharma® August 2016 WW Sales ($m) Rank 42 WW Market Share 2015 CAGR WW Market Share Current 2015 2022 2015-22 2015 2022 Nucleoside reverse transcriptase inhibitor (NRTI) & HIV integrase inhibitor - 3,489 n/m - 6.9% Phase III Gilead Sciences Nucleoside reverse transcriptase inhibitor (NRTI), CYP3A inhibitor & protease inhibitor - 1,612 n/m - 3.2% Phase III tenofovir alafenamide fumarate Gilead Sciences Nucleoside reverse transcriptase inhibitor (NRTI) - 1,014 n/m - 2.0% Phase III Sofosbuvir, Velpatasvir & Voxilaprevir sofosbuvir; velpatasvir; voxilaprevir Gilead Sciences Hepatitis C NS3 protease, Hepatitis C nucleoside NS5A & NS5B polymerase inhibitor - 897 n/m - 1.8% Phase III ARC-520 - Arrowhead Pharmaceuticals Hepatitis B RNAi therapeutic - 480 n/m - 0.9% Phase II EvaluatePharma® World Preview 2016 Status Copyright © 2016 Evaluate Ltd. All rights reserved. Anti-Virals Market to 2022 part 3 of 3 Product Segment Contribution to Sales in 2022 Source: EvaluatePharma® August 2016 60 WW Sales ($bn) $50.5bn -$14.1bn 40 $21.0bn $50.5bn New Launches 2022 Sales -$6.9bn 20 0 2015 Sales 43 Established EvaluatePharma® World Preview 2016 Recently Launched Copyright © 2016 Evaluate Ltd. All rights reserved. 2022: Top 50 Selling Products in the World Opdivo and Revlimid to compete for the top spot in 2022, while Humira is expected to step down following biosimilar launch. EvaluatePharma® sellside consensus forecast finds that Opdivo, Bristol-Myers Squibb’s anti-PD-1 monoclonal antibody, will be the number one selling product worldwide in 2022, with sales of $14.6bn. However, following the recent setback in NSCLC, Revlimid could take the crown with expected sales of $13bn in 2022 provided that Humira loses ground following the potential launch of biosimilars (current forecast still positions Humira at number 2 with part 1 of 2 $13.6bn in 2022). In the PD-1 gold rush, Merck’s Keytruda - currently anticipated to reach close to $6bn in 2022 - is expected to take advantage of Opdivo’s reccent setback in NSCLC, while Roche’s Tecentriq is expected to reach $5.3bn in 2022. Only three products currently in R&D are present in the top 50, the biggest of which is Roche’s Ocrevus, a phase III anti-CD20 MAb for the treatment of multiple sclerosis, it is expected to launch worldwide in December 2017. Source: EvaluatePharma® August 2016 WW Product Sales ($m) Market Rank Product Generic Name Company Pharmacological Class 2015 2022 CAGR Status 1. Opdivo nivolumab Bristol-Myers Squibb + Ono Pharmaceutical Anti-programmed death-1 (PD-1) MAb 1,119 14,634 +44% Marketed 2. Humira adalimumab AbbVie + Eisai Anti-tumour necrosis factor alpha (TNFa) MAb 14,359 13,645 -1% Marketed 3. Revlimid lenalidomide Celgene Immunomodulator 5,801 13,024 +12% Marketed 4. Xarelto rivaroxaban Bayer + Johnson & Johnson Factor Xa inhibitor 3,930 7,827 +10% Marketed 5. Eylea aflibercept Regeneron Pharmaceuticals + Bayer + Santen Pharmaceutical Vascular endothelial growth factor receptor (VEGFr) kinase inhibitor 4,372 7,702 +8% Marketed 6. Imbruvica ibrutinib AbbVie + Johnson & Johnson Bruton's tyrosine kinase (BTK) inhibitor 1,299 7,287 +28% Marketed 7. Enbrel etanercept Amgen + Pfizer + Takeda Tumour necrosis factor alpha (TNFa) inhibitor 9,037 7,177 -3% Marketed 8. Prevnar 13 pneumococcal vaccine Pfizer + Daewoong Pharmaceutical Pneumococcal vaccine 6,328 6,069 -1% Marketed 9. Keytruda pembrolizumab Merck & Co Anti-programmed death-1 (PD-1) MAb 566 5,959 +40% Marketed 10. Januvia/ Janumet sitagliptin phosphate Merck & Co + Ono Pharmaceutical + Almirall + Daewoong Pharmaceutical Dipeptidyl peptidase IV (DPP-IV) inhibitor 6,333 5,913 -1% Marketed 11. Ibrance palbociclib Pfizer Cyclin-dependent kinase (CDK) 4 & 6 inhibitor 723 5,709 +34% Marketed 12. Soliris eculizumab Alexion Pharmaceuticals Anti-complement factor C5 MAb 2,590 5,657 +12% Marketed 13. Eliquis apixaban Bristol-Myers Squibb Factor Xa inhibitor 1,860 5,422 +17% Marketed 14. Tecentriq atezolizumab Roche Anti-programmed death-1 ligand-1 (PD-L1) MAb - 5,331 15. Avastin bevacizumab Roche Anti-vascular endothelial growth factor receptor (VEGFr) MAb 6,945 5,178 -4% Marketed 16. Prolia/Xgeva denosumab Amgen + Daiichi Sankyo Anti-RANKL MAb 2,925 5,148 +8% Marketed 17. Victoza/Saxenda liraglutide [rDNA origin] Novo Nordisk Glucagon-like peptide 1 (GLP-1) agonist 2,701 4,918 +9% Marketed 18. Darzalex daratumumab Johnson & Johnson Anti-CD38 MAb 9 4,909 +146% Marketed 19. Botox onabotulinumtoxinA Allergan + GlaxoSmithKline Botulinum toxin 2,808 4,823 +8% Marketed 20. Perjeta pertuzumab Roche Anti-HER2 (ErbB-2) MAb 1,502 4,775 +18% Marketed 21. Entresto sacubitril; valsartan Novartis Angiotensin II receptor (AT1) antagonist & neprilysin inhibitor (ARNI) 21 4,698 +117% Marketed Marketed 22. Tecfidera dimethyl fumarate Biogen Fumarate 3,638 4,677 +4% Marketed 23. Xtandi enzalutamide Astellas Pharma Androgen receptor antagonist 2,101 4,658 +12% Marketed 24. Harvoni ledipasvir; sofosbuvir Gilead Sciences Hepatitis C nucleoside NS5A & NS5B polymerase inhibitor 13,864 4,531 -15% Marketed 25. Stelara ustekinumab Johnson & Johnson Anti-interleukin-12 (IL-12) & interleukin-23 (IL-23) MAb 2,474 4,527 +9% Marketed Top 26-50 continued over… 44 EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. 2022: Top 50 Selling Products in the World part 2 of 2 Source: EvaluatePharma® 1 August 2016 Rank Product Generic Name Company Pharmacological Class WW Product Sales ($m) Market 2015 Status 2022 CAGR 26. Herceptin trastuzumab Roche Anti-HER2 (ErbB-2) MAb 6,794 4,467 -6% Marketed 27. Triumeq abacavir sulfate; dolutegravir sodium; lamivudine GlaxoSmithKline Nucleoside reverse transcriptase inhibitor (NRTI) & HIV integrase inhibitor 1,116 4,449 +22% Marketed 28. Spiriva tiotropium bromide Boehringer Ingelheim + Pfizer Long-acting muscarinic antagonist (LAMA) 3,942 4,390 +2% Marketed 29. Descovy emtricitabine; tenofovir alafenamide Gilead Sciences Nucleoside reverse transcriptase inhibitor (NRTI), CYP3A inhibitor & protease inhibitor - 4,343 30. Repatha evolocumab Amgen + Astellas Pharma Anti-proprotein convertase subtilisin-like kexin type 9 (PCSK9) MAb 9 4,280 31. Ocrevus ocrelizumab Roche Anti-CD20 MAb - 3,962 32. Jardiance empagliflozin Boehringer Ingelheim + Eli Lilly Sodium-glucose cotransporter-2 (SGLT2) inhibitor 118 3,932 +65% Marketed 33. Cosentyx secukinumab Novartis Anti-interleukin-17A (IL-17A) MAb 261 3,856 +47% Marketed 34. Genvoya cobicistat; elvitegravir; emtricitabine; tenofovir alafenamide fumarate Gilead Sciences Nucleoside reverse transcriptase inhibitor (NRTI), HIV integrase inhibitor & CYP3A inhibitor 45 3,731 +88% Marketed 35. Dupilumab dupilumab Sanofi Anti-interleukin-4 (IL-4) & interleukin-13 (IL-13) MAb - 3,725 36. Privigen1 immune globulin (human) CSL Immunoglobulin 2,467 3,701 +6% Marketed 37. Gazyva obinutuzumab Roche Anti-CD20 MAb 133 3,643 +60% Marketed 38. Remicade infliximab Johnson & Johnson + Merck & Co + Mitsubishi Tanabe Pharma Anti-tumour necrosis factor alpha (TNFa) MAb 8,151 3,635 -11% Marketed 39. Bictegravir/F/ TAF bictegravir sodium; emtricitabine; tenofovir alafenamide fumarate Gilead Sciences Nucleoside reverse transcriptase inhibitor (NRTI) & HIV integrase inhibitor - 3,489 40. Orkambi ivacaftor; lumacaftor Vertex Pharmaceuticals Cystic fibrosis transmembrane conductance regulator (CFTR) corrector 351 3,485 +39% Marketed 41. Invokana canagliflozin Johnson & Johnson + Mitsubishi Tanabe Pharma Sodium-glucose cotransporter-2 (SGLT2) inhibitor 1,333 3,429 +14% Marketed 42. Vyvanse lisdexamfetamine dimesylate Shire + Shionogi Psychostimulant 1,722 3,338 +10% Marketed 43. Simponi golimumab Johnson & Johnson + Merck & Co Anti-tumour necrosis factor alpha (TNFa) MAb 2,018 3,139 +7% Marketed 472 3,128 +31% Marketed - 3,076 10 3,063 +127% Marketed +141% Marketed R&D R&D R&D 44. Otezla apremilast Celgene Phosphodiesterase IV (PDE4) inhibitor 45. Ocaliva obeticholic acid Intercept Pharmaceuticals + Sumitomo Dainippon Pharma Farnesoid X receptor (FXR) agonist 46. Praluent alirocumab Sanofi Anti-proprotein convertase subtilisin-like kexin type 9 (PCSK9) MAb 47. Rituxan rituximab Roche + Pharmstandard Anti-CD20 MAb 7,393 3,036 -12% Marketed 48. NovoRapid insulin aspart Novo Nordisk Insulin analogue 3,082 2,976 -1% Marketed 49. Lantus insulin glargine Sanofi Insulin analogue 7,089 2,953 -12% Marketed 50. Tresiba insulin degludec Novo Nordisk Insulin analogue 214 2,922 +45% Marketed Total 144,025 254,346 +8% Total WW Individual Products Forecast in EvaluatePharma® 617,246 919,310 +6% Marketed Marketed Note: Sales represent company reported sales where available, otherwise based on an average of equity analyst estimates. 1 Includes entire Immunoglobulin/VIg sales for company. 45 EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. 2022: Top 50 Selling Products in the USA Humira still the leading product in USA in 2022; Roche products make up 10% of Top 50 in 2022. EvaluatePharma® finds that AbbVie’s Humira will continue to be the leading product in the USA in 2022, with sales of $10.7bn This is a clear sign that sellside analysts are still very skeptical about the potential launch of a biosimilar version. Celgene’s Revlimid will be in second place with sales growing on average 13% per year to $8.1bn part 1 of 2 in 2022, and with a CAGR of 36%, it won’t be long before Opdivo is hot on their heels. Roche is set to have five products in the USA Top 50 by 2022, including their phase III anti-CD20 MAb, Ocrevus, for the treatment of multiple sclerosis, and recently approved Tecentriq, the third PD-1 product to launch in the market following Opdivo and Keytruda. Source: EvaluatePharma® 1 August 2016 USA Product Sales ($m) Rank Product Generic Name Company Pharmacological Class 2015 2022 CAGR US Market Status 1. Humira adalimumab AbbVie Anti-tumour necrosis factor alpha (TNFa) MAb 8,405 10,729 +4% Marketed 2. Revlimid lenalidomide Celgene Immunomodulator 3,535 8,145 +13% Marketed 3. Opdivo nivolumab Bristol-Myers Squibb Anti-programmed death-1 (PD-1) MAb 823 7,222 +36% Marketed 4. Enbrel etanercept Amgen Tumour necrosis factor alpha (TNFa) inhibitor 5,099 5,065 -0% Marketed 5. Eylea aflibercept Regeneron Pharmaceuticals Vascular endothelial growth factor receptor (VEGFr) kinase inhibitor 2,676 5,014 +9% Marketed 6. Tecentriq atezolizumab Roche Anti-programmed death-1 ligand-1 (PD-L1) MAb - 3,810 7. Eliquis apixaban Bristol-Myers Squibb Factor Xa inhibitor 1,023 3,731 +20% Marketed 8. Imbruvica ibrutinib AbbVie Bruton's tyrosine kinase (BTK) inhibitor 985 3,683 +21% Marketed 9. Xarelto rivaroxaban Johnson & Johnson Factor Xa inhibitor 1,868 3,606 +10% Marketed 10. Ibrance palbociclib Pfizer Cyclin-dependent kinase (CDK) 4 & 6 inhibitor 718 3,462 +25% Marketed 11. Tecfidera dimethyl fumarate Biogen Fumarate 2,908 3,310 +2% Marketed 12. Entresto sacubitril; valsartan Novartis Angiotensin II receptor (AT1) antagonist & neprilysin inhibitor (ARNI) 21 3,279 +106% Marketed 13. Prevnar 13 pneumococcal vaccine Pfizer Pneumococcal vaccine 4,026 3,217 -3% Marketed 14. Stelara ustekinumab Johnson & Johnson Anti-interleukin-12 (IL-12) & interleukin-23 (IL-23) MAb 1,677 3,172 +10% Marketed 15. Victoza/Saxenda liraglutide [rDNA origin] Novo Nordisk Glucagon-like peptide 1 (GLP-1) agonist 1,936 3,079 +7% Marketed 16. Prolia/Xgeva denosumab Amgen Anti-RANKL MAb 1,843 3,042 +7% Marketed 17. Vyvanse lisdexamfetamine dimesylate Shire Psychostimulant 1,599 3,029 +10% Marketed 18. Ocrevus ocrelizumab Roche Anti-CD20 MAb - 3,025 R&D 19. Descovy emtricitabine; tenofovir alafenamide Gilead Sciences Nucleoside reverse transcriptase inhibitor (NRTI), CYP3A inhibitor & protease inhibitor - 2,936 Marketed 20. Jardiance empagliflozin Boehringer Ingelheim + Eli Lilly Sodium-glucose cotransporter-2 (SGLT2) inhibitor 99 2,804 +61% Marketed 21. Keytruda pembrolizumab Merck & Co Anti-programmed death-1 (PD-1) MAb 393 2,801 +32% Marketed 22. Triumeq abacavir sulfate; dolutegravir sodium; lamivudine GlaxoSmithKline Nucleoside reverse transcriptase inhibitor (NRTI) & HIV integrase inhibitor 779 2,673 +19% Marketed 23. Xtandi enzalutamide Astellas Pharma Androgen receptor antagonist 1,237 2,608 +11% Marketed 24. Avastin bevacizumab Roche Anti-vascular endothelial growth factor receptor (VEGFr) MAb 3,178 2,591 -3% Marketed 25. Harvoni ledipasvir; sofosbuvir Valeant Pharmaceuticals International Hepatitis C nucleoside NS5A & NS5B polymerase inhibitor 10,090 2,586 -18% Marketed Marketed Top 26-50 continued over… 46 EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. 2022: Top 50 Selling Products in the USA part 2 of 2 Source: EvaluatePharma® 1 August 2016 USA Product Sales ($m) Rank Product Generic Name Company Pharmacological Class 2015 2022 CAGR US Market Status 26. Botox onabotulinumtoxinA Allergan Botulinum toxin 1,715 2,486 +5% Marketed 27. Genvoya cobicistat; elvitegravir; emtricitabine; tenofovir alafenamide fumarate Gilead Sciences Nucleoside reverse transcriptase inhibitor (NRTI), HIV integrase inhibitor & CYP3A inhibitor 44 2,471 +78% Marketed 28. Darzalex daratumumab Allergan Anti-CD38 MAb 9 2,466 +123% Marketed 29. Invokana canagliflozin Johnson & Johnson Sodium-glucose cotransporter-2 (SGLT2) inhibitor 1,238 2,454 +10% Marketed 30. Perjeta pertuzumab Roche Anti-HER2 (ErbB-2) MAb 835 2,359 +16% Marketed 31. Repatha evolocumab Amgen Anti-proprotein convertase subtilisin-like kexin type 9 (PCSK9) MAb 7 2,348 +128% Marketed 32. Cosentyx secukinumab Novartis Anti-interleukin-17A (IL-17A) MAb 220 2,253 +39% Marketed 33. Otezla apremilast Celgene Phosphodiesterase IV (PDE4) inhibitor 440 2,251 +26% Marketed 34. Tresiba insulin degludec Novo Nordisk Insulin analogue 35. Soliris eculizumab Alexion Pharmaceuticals Anti-complement factor C5 MAb 36. Neulasta pegfilgrastim Amgen Granulocyte colony-stimulating factor (G-CSF) 37. Orkambi ivacaftor; lumacaftor Vertex Pharmaceuticals Cystic fibrosis transmembrane conductance regulator (CFTR) corrector 38. Remicade infliximab Johnson & Johnson Anti-tumour necrosis factor alpha (TNFa) MAb 39. Dupilumab dupilumab Sanofi 40. Venclexta venetoclax 41. Xifaxan 200 42. - 2,202 951 2,183 +13% Marketed 3,891 2,158 -8% Marketed 351 2,152 +30% Marketed 4,453 2,148 -10% Marketed Anti-interleukin-4 (IL-4) & interleukin-13 (IL-13) MAb - 2,087 R&D Roche + AbbVie B-cell lymphoma 2 (Bcl-2) inhibitor - 2,044 Marketed rifaximin Valeant Pharmaceuticals International Ansamycin 716 2,005 Bictegravir/F/TAF bictegravir sodium; emtricitabine; tenofovir alafenamide fumarate Gilead Sciences Nucleoside reverse transcriptase inhibitor (NRTI) & HIV integrase inhibitor - 1,992 R&D 43. Fovista pegpleranib sodium Ophthotech Anti-platelet derived growth factor (PDGF)-B aptamer - 1,973 R&D 44. Trulicity dulaglutide Eli Lilly Glucagon-like peptide 1 (GLP-1) agonist 208 1,785 +36% Marketed 45. Gardasil human papillomavirus (HPV) vaccine Merck & Co Human papillomavirus (HPV) vaccine 1,521 1,783 +2% Marketed 46. Ocaliva obeticholic acid Intercept Pharmaceuticals Farnesoid X receptor (FXR) agonist - 1,767 47. Jakafi ruxolitinib phosphate Incyte Janus kinase (JAK)-1/2 inhibitor 601 1,759 +17% Marketed 48. Xyrem sodium oxybate Jazz Pharmaceuticals CNS depressant 955 1,737 +9% Marketed 49. Semaglutide semaglutide Novo Nordisk Glucagon-like peptide 1 (GLP-1) agonist - 1,710 50. Rexulti brexpiprazole Otsuka Holdings 5-HT1A (serotonin) & D2 partial agonist & 5-HT2 (serotonin) receptor antagonist 38 1,665 +72% 73,111 150,855 +11% 292,688 468,886 +7% Total Total USA Individual Products Forecast in EvaluatePharma ® Marketed +16% Marketed Marketed R&D Marketed Note: Sales represent company reported sales where available, otherwise based on an average of equity analyst estimates. 47 EvaluatePharma® World Preview 2016 Copyright © 2016 Evaluate Ltd. All rights reserved. About EvaluatePharma ® Since 1996 EvaluatePharma has been providing senior decision makers within the pharmaceutical industry with an essential service that models the sector from the viewpoint of the world’s financial markets. EvaluatePharma’s forward looking view of the market is hugely influential as it displays the consensus of expectations, which influence company stock market valuations. The forecasts of equity analysts reveal their perspectives on individual company performance, industry trends and the macro economic environment. EvaluatePharma has captured the consensus forecasts of equity analysts and seamlessly integrated them with the historic results, as reported by companies. From this comprehensive view of the industry, its past and expected future performance emerges and can be analysed using EvaluatePharma. Analyses range from total market trends and therapeutic overviews to individual company performance and product progress. Whatever your view on the future of the industry, EvaluatePharma is the essential guide to value in the pharma and biotech sector. 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